Digital-Only Banks in Consideration by over Half of US Consumers

Digital-Only Banks in Consideration by over Half of US Consumers

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More than 50% of US consumers wanting to change banks would consider a digital-only bank, with the same finding reflected in a similar UK survey, according to Juniper Research. However, the findings showed that banks need to be more than technologically competent; users’ top priorities include sign-up benefits and good rates, which are often more important than digital features.

There are marked differences between US and UK consumers around reasons to switch banks. The most common driver in the US is for sign-up benefits, but UK switchers prefer better overall rates. Digital integrations are less important to consumers, with 26% of US switchers reporting integration with other services as important. In the UK, where Open Banking integrations are available, only 13% of switchers consider this a reason to switch.

The survey found that almost half of UK mobile banking users were unsure if they had used Open Banking services; pointing to an awareness gap that needs closing for Open Banking to be successful. COVID-19 has greatly increased contactless payments use, with 60% of US contactless users stating COVID-19 safety as a reason to use contactless payments.

Despite the head start OEM Pay had in the US, 89% of American contactless payments users now use contactless cards, and 35% of current non-users are expecting to start using cards in future. However, use of OEM Pay solutions remains strong, with 85% of US contactless users using at least one OEM Pay solution.

"Contactless cards have become a key feature for the US payment landscape, in large part because of COVID-19,"’said research author James Moar. "With strong OEM Pay usage, situational use of the different contactless payment solutions will emerge; potentially leading to specialised solutions in future."

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