Traditional Banks are losing ground to the new Digital Banking Platforms

The trust index of citizens towards digital banks is increasing internationally. According to a recent BCG study, nearly half of consumers (43%) worldwide say that digital banks offer better mobile banking experiences. On the contrary, the corresponding percentage of citizens, who consider that traditional banks offer a better mobile banking experience, is limited to 37%. In addition, consumers appreciate that digital banks offer greater speed and ease of opening a new account than traditional banks, which has proven to be a critical factor in choosing a financial institution.

Characteristic of the new dynamic that is developing in relation to digital banks is the fact that, based on the findings of this research, for the first time in 2022 an online banking platform, Monzo, emerged as the bank of choice for 50% of its customers , while a year ago this percentage was only 25%.

According to the BCG study entitled “Banks must create powerful hybrid experiences as challengers press digital advantage”, the ever-increasing competitiveness of digital banks is primarily due to the possibility of a quick and easy process of opening a bank account combined with access to applications mobile telephony, which provide a personalized experience and services to users.

In addition to personalized services, low fees, competitive interest rates and attractive rewards programs further strengthen the position of digital banks.

Traditional banks maintain their competitive edge in security

At the same time, however, according to the research, traditional banks maintain their competitive advantage in terms of security, while customers still prefer the branch network for many of their daily transactions. Also, when it comes to complex transactions or complex products, customers prefer face-to-face communication and a visit to the store.

However, traditional banks are being challenged to accelerate their transformation, following three key strategies: First, investing in leading hybrid experiences, leveraging mobile applications to create daily customer contact, and realigning the branch network by moving lower value transactions to digital channels. Second, by investing in cyber security and fraud protection to safeguard their competitive security advantage.

Source: Digital Life! by

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