Banks are failing to provide customers with enough financial advice, a new survey has shown.
The second annual Performance Against Customer Expectations (PACE) index from banking software firm FIS has revealed 82 per cent of UK banking customers receive no financial advice as the fast growing mobile channel struggles to offer the same level of engagement as branches.
A lack of engagement has taken its toll on customer satisfaction, with levels falling by three percentage points compared to the year before. Hidden fees, banks not following through on promises, and lack of recognition and reward for loyalty, topped the list of customer complaints.
A new wave of challenger banks could be in line to benefit from increased customer dissatisfaction with their current bank.
“Banks moving slowly, if at all, to address problems means there is an opportunity for new players coming on to the market,” Martin Barber, Europe managing director of FIS Global, told City A.M.
“Banks need to engage more with their customers using mobile services and apps."
There are set to be a flurry of new banks coming on the market in coming months. The likes of internet banks Atom (an FIS customer), Tandem, and Starling are all going to be trying to take market share from the biggest high street retailers – four of which (HSBC, RBS, Lloyds Banking Group, and Barclays) control 77 per cent of the current account market.
The competition and markets authority recently ruled that banks need to cap their overdraft fees in an attempt to make banking fairer for customers who can become trapped in a cycle of fees and payments.
The mobile channel – which has grown rapidly over recent years – has struggled to offer customers anything more than account balance checking and basic payment services and banks around the world are trying to figure out how to talk to customers who increasingly only deal with their bank online.
The PACE index found younger people are twice as likely as the average bank customer to use mobile banking, yet even among this group only 44 per cent use any kind of banking app.
"We’ve shown how UK banks don’t currently do well at providing what people want in terms of online advice and coaching in money management. Yet people are open to the idea and want help to meet their financial aspirations," Barber added.