In my first blog in this short series on how the behaviour of UK financial services customers has changed amid the pandemic, I looked at the way COVID-19 has accelerated consumers’ migration to digital banking services. And I drew on the UK findings from our Banking Consumer Study: Making digital more human to examine the effects on switching, demand for personalised and bundled services, and willingness to share data.

Taken together, the results indicate how deep – and potentially durable – the changes in all these areas are across different customer segments. In this blog, I’ll drill down into the final three areas covered by our research. And I’ll draw on all the findings to define a set of principles for banks to apply as they compete for customers’ business and trust in an increasingly digital world.

Digital engagement, pandemic impacts and neobanks

The first area is digital engagement. Here our findings show the pandemic hasn’t just accelerated UK consumers’ move to digital, but has also strengthened their reliance on it. Our 2020 study reveals two major tipping-points. The first is that mobile services have become the main channel for interacting with banks – up by 50 percent from 2018 – while the second is that digital channels have become the most popular way of joining a new bank.

Equally tellingly, two-thirds of respondents would like digital experiences to replace in-person financial services activities. And one-third have no major gripes with using video calls for interactions. The implication? Banks and insurers looking to digitalise their engagement with customers are pushing against an open door – provided the experience retains the vital human element.

The next area is UK customers’ response to COVID-19. As it happens, I’ve already published a LinkedIn blog on the consumer trends triggered by the pandemic. I highlighted three in particular: more “sustainable” and local buying, virtual engagement advancing from option to expectation, and a rising emphasis on health and wellbeing – including financial.

Our research mirrors all of these shifts. Most consumers think their bank responded well during the pandemic, with 65 percent agreeing that “my bank is providing the country with the support it needs” – perhaps overlooking (or unaware of) the fact that much of this support was mandated and/or underwritten by the government. Assistance programmes such as chatbots were also well received, with 45 percent of customers wanting these to continue post-pandemic. Essentially, the industry has come out of the crisis looking good, with an opportunity to build on strengthened brand advocacy and trust.

The final area is familiarity with neobanks – or lack of it. It seems that neobanks face particular challenges in attracting new customers, given that 42 percent of consumers are unfamiliar with their offerings, and most are generally satisfied with their current bank. That said, neobank account users have increased from 9.5 percent to 15 percent of consumers since 2018, with uptake rising across all personas, and high-income consumers the most likely to have a neobank account. Also, one reason many customers joined neobanks was to get better currency exchange rates when abroad. Lockdowns have removed this selling-point, but it may return when foreign travel resumes.

Taken together, I think our findings underline that banks must accept the permanent and ongoing nature of consumers’ shift to digital, and that future success depends on creating more human / digital banking experiences. Doing this is all the more important since banks need to sustain and build on their improved post-pandemic services at the precise moment when they’re looking to taper COVID-19 support and make difficult credit decisions.

The overall message? To succeed in the years to come, banks and insurers should strive to maintain the entrepreneurial spirit that flourished in 2020. To help them do this, I believe they should keep five principles in mind:

  1. Understand which shifts in consumer behaviour and preference are temporary and which are here to stay – something our data shows varies between different customer groups.
  2. With this in mind, unearth the needs and expectations of specific segments of your customer base.
  3. Determine how your strategy and operating model need to change to respond to these reshaped preferences.
  4. Prioritise technological flexibility and agility so that new digital offerings can be launched and rolled out at high pace.
  5. Inject humanity and personalisation into digital channels in service areas and contexts where they will have the most positive impact.

What’s clear is that consumers’ increased use of digital channels is here for the long term. Making digital services human will ensure your bank or insurer is too.

For further insights read the Accenture Banking Consumer Study report: Visit Accenture.com