Banking customers are increasingly opening multiple accounts, particularly the younger generations, with up to another of Millennials and Gen-Zs having opened at least two new accounts previously 5 years. The research, commissioned by digital banking software provider CREALOGIX, found individuals are attracted by mobile features that improve convenience, functionality and control.
Gen-Zs (survey respondents aged 18-21) are particularly active in opening new accounts; 81 percent would consider opening an additional bank account in the next three years, dropping slightly to 75 percent of Millennials. These younger generations are driving the rapid adoption of challenger banks, having a quarter of those under 37s surveyed already using mobile-only challenger accounts. The research found that Monzo was the most popular with Millennials.
Mobile banking features attract new account signups
When asked the things they look for when opening a new account, respondents overwhelmingly responded with feedback relating to mobile banking user experience, including convenience, functionality and simple control over their account. Under 37s are particularly inclined towards mobile banking features, with 83 per cent of Gen-Zs and 76 percent of Millennials stating that access to certain desirable features would attract them to try out another bank. Gen-Zs will quickly make up the largest demographic cohort, so consumer experience innovations pioneered by challenger banks are set to provide them a strong advantage in continuing to win market share unless high street banks are able to offer more feature parity.
A graph showing the proportion of UK consumers that would be encouraged to open a new banking account based on specific features
Anton Zdziebczok, Head of Product Strategy at CREALOGIX UK, said: “With the recent anniversary of the Open Banking initiative, our research discovered that the directive has had a positive impact on overall competition in the retail banking market, and customers are increasingly trying out new accounts. This comes as good news for financial regulators, who have been fighting in the 10 years since the financial crisis for more consumer choice and innovation within the highly concentrated UK retail banking market.
“This increased competition encourages innovation, ultimately delivering the very best experience to the consumer. However, where the agile, mobile-first banks are using technology to win new clients, the incumbent banks have been slower to adapt.”
Jo Howes, Commercial Director at CREALOGIX UK, commented: “To compete and remain relevant, every financial institution needs to increase the pace of innovation and offer differentiated mobile user experience features to satisfy digitally-demanding customers.
“For now, the challenge for established financial brands is just how to maintain reasonable feature parity with the challengers, and time is important. With every passing month, the feature and style gap between challengers and less technologically agile banks is widening. Butestablished banks possess the foundations of trust and market share to keep them ahead of the game. They're more than able to bring the competitive fight to the challengers if they succeed in using technology to place their clients at the heart of their business.”
CREALOGIX provides digital banking software programs to financial institutions who seek to accelerate their time to market with new customer-oriented features and services.