Three in ten say service from high street banks has worsened

Traditional high street banks and building societies are losing ground to digital challengers on service quality, according to new research.

The findings from CRIF show that traditional banks and building societies are the only type of financial provider where consumers are more likely to say service has worsened than improved over the past three years (29% vs 26%).

Three in ten (29%) consumers say service from traditional banks and building societies has worsened over the last three years, compared with just 7% who say the same of digital banks and fintechs. By contrast, digital providers are far more likely to be seen as improving, with 43% of consumers saying their service has improved.

Sara Costantini, Regional Director for the UK & Ireland at CRIF, said: “Digital banks and fintechs are setting the standard for what good looks like in financial services, and consumers can see the difference.

“What is striking is how traditional banks are falling behind. It’s clear that consumers broadly welcome the rise of digital banking services but remain frustrated when this digitisation leaves them with poorer services that lack human support. As the only provider type that customers think has worsened rather than improved, incumbents can no longer rely on their scale or legacy alone to retain customers.”

Consumers have broadly welcomed the rise of digital financial services, with two in five (41%) saying they have made managing their money easier, while almost half (48%) say they can manage their finances 24/7.

But a significant minority feel the shift has come at a cost. One in five (20%) say bank branch closures have made it harder to get the support they need, while 16% say the growth of digital services has led to a decrease in service quality and 15% believe digital services have only been introduced to reduce providers’ costs.

Costantini concluded, “The banks that will win out are those that match the challengers on digital experience without leaving behind the people who relied on in-person services. The opportunity for high street banks is clear: combine trusted brands and longstanding customer relationships with smarter use of data, analytics and digital services. Those that can deliver both convenience and confidence will be best placed to win the next generation of customers.

“In the end, customers do not choose between digital and human banking. They expect both. The winners will be the institutions that use technology not just to make banking faster, but to make it feel more personal, relevant and reassuring.”

Change in service quality by financial provider type

Provider type	Improved	Worsened	Net
Digital banks and fintechs	43%	7%	+36
Investment and asset management firms	19%	8%	+12
Credit and lending providers	21%	11%	+9
Insurers	17%	17%	0
Traditional banks and building societies	26%	29%	-3