Reinvention: the real battle for UK Challenger Banks
These findings from global public relations firm Weber Shandwick and research partner ComRes demonstrate how new players in the financial services sector face mass indifference and confusion from the British public on the real impact of new brands entering the marketplace.
Despite the UK government recently approving and considering up to 20 new banking licenses, the study shows how just one in eight (12%) would actually welcome an increase in the number of bank branches on their High Street.
During a panel discussion hosted today by Weber Shandwick, leaders from the financial services sector, policymakers, media and member associations debated what these findings would mean for challenger banks that are already stalled by barriers to entry.
Liz Wolstenholme, UK head of brand strategy, Weber Shandwick, said: “The new players in the financial services sector have their work cut out for them. Indifference and confusion among the British public are the greater forces at work, and this research shows brands need to adopt new rules of engagement.
“Our ‘classic’ brands are increasingly behaving like challengers, making the case for consumers to stay with their existing bank that much stronger. We know major banks are adopting what’s traditionally been described as a challenger model, offering online services with increasingly sophisticated user experience.
Other key findings from the research reveal that, despite account switching being made easier, only 26% of those who welcome an increase in the number of bank branches on the High Street would consider making the switch to a new bank. Yet the majority (59%) of those who welcome an increase in the number of bank branches on the High Street believe it would lead to an increase in competition.
Prevailing notions of a lack of confidence and trust in the sector were also reinforced by the research findings. For instance, British adults are broadly unsure (35%agreeing vs. 36 %disagreeing) whether a greater degree of competition, brought on by an increased number of banks on the High Street, will help rebuild trust in the financial services sector.
Mary Whenman, managing director, Corporate, Financial & Public Affairs, Weber Shandwick, added: “The financial services market continues to be fast-moving and dynamic with huge opportunities available.
“The onus is now on bank brands themselves, ‘challenger’ or otherwise, to find new ways to engage with consumers, giving them a compelling reason to stay or switch. CMOs need to lead the way in driving innovation and engagement with existing and potential customers.”