Half of Brits now express heightened caution towards online banking and mobile apps compared to four years ago. This increase in wariness is revealed in new research by the personal finance comparison site finder.com, indicating a steady drop in positivity since 2020.
The primary concern driving this decline is the fear of online fraud. A significant 35% of UK adults identified this as a major worry when using online banking platforms. This study also analysed the recommendation scores of the ten most popular providers in the Ipsos independent service quality survey over the past four years. Since August 2020, the survey shows a consistent decline in the number of customers willing to recommend these services, with an average decrease of 5%.
Generational Divide in Data Privacy Concerns
The wariness extends to data privacy, with more than 12% of Brits growing increasingly concerned over the extensive personal information collected by online banks. Younger generations, particularly Gen Z and millennials, are the most anxious about this issue. Around 21% of Gen Z and 19% of millennials have cited data collection as a reason for their growing distrust in digital banking solutions. In contrast, only a small fraction of baby boomers and the silent generation share this concern, highlighting a significant generational divide in perceptions of online banking safety.
Implications for Banking Industry
These findings suggest significant challenges ahead for online banking platforms, especially in convincing younger customers of the security of their data. Kate Steere, a banking expert at finder.com, commented on the potential of personalised banking tools, such as the recently launched savings app feature by HSBC, which aims to offer benefits to both banks and customers. She noted, “Personalised app tools are a win-win for both banks and customers, as we can see from HSBC’s savings app feature, which launched yesterday. Customers get a tool that’s useful to them, and banks get more data on how each customer manages their money, or what they want to do with it.
However, Steere emphasized that gaining customer trust is crucial, especially among younger generations. “However, it’s clear that banking providers have some work to do in gaining their customers’ trust, particularly with the younger generations. If they want to truly harness AI’s capabilities and provide a personalised customer experience, they’ll need to reassure customers that their money and personal data are in safe hands. Banks that fail to do this will see customers vote with their feet and go elsewhere.”
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