unsurprisingly Iām not concerned by the results of this survey, since the challenger banks have only just started developing their products & services and neither is Tristan (quote from the story) -
āWe believe the future of finance is global and mobile. People want to be able to do everything instantly, anywhere in the world, with no hassle from their mobile. Bank branches are dying. Waiting on hold on the telephone to access your bank account is dying. Traditional banking is dying.ā
The story doesnāt mention whether MasterCard explained the benefits of the challenger either. Iām assuming that they didnāt because āsellingā the services would have made the results biased but obviously a lot of people havenāt heard what makes the challenger banks different yetā¦
I would assume this is down to people not understanding the benifits they bring possibly? It would be interesting to show someone what Monzo can do and for them not to be impressed or even consider switching.
Having tried to convince a lot of people to move to monzo, I reckon the biggest long term blocker is simple partial laziness. Most peopleās banks work for what they need them to. Introducing them to a new bank even if it is functionality rich and easy to use itās still a pushā¦ just like trying to convince someone to move to iOS or anything Apple really ( minus the massive price tag)ā¦ I agree that eventually when they become more main stream it will be easier to get people to migrate. Current account switching service helps the message greatly, as long as the user understands exactly what that isā¦
Iām with First Direct and have never experienced such issues. Not all banks are archaic, but I admit that Monzo has shown me that one can expect moreā¦
First Direct has the concept of ace customer service down pat, but their digital offering is out of the ark. Other legacy banks (Barclays, NatWest) best First Direct hands down.
Generally most people donāt feel compelled to switch to something until theyāve seen it in action and can clearly see how much better it is.
If you showed all of those polled people our app and perhaps demonstrated a couple of the key features, itād be a different story.
That asideā¦ if 14% of people would switch to an app-based challenger bank whilst ostensibly not knowing much about it, thatās still 10 million people in the UK alone! I think weād be more than happy to grab that amount of people within the next 12 months. Then we can work on getting the other 86% on our side
Apathy best describes most peoples view of switching banks.
Many people have seen snippets in the news about challenger banks. My Dad for instance is 70 and will never move from Lloyds who he has banked with. He doesnāt own a smartphone so app based banks will pass him by. My Mum has a smartphone and has just started to use her Barclays app, but again wouldnāt switch.
Iām mid 40ās, I Bank with FD so I donāt suffer bad customer service and their app is functional but featureless.
Iām interested in app based banks as I can see the potential going forward. Iād like to see childrenās accounts come quickly, as they are the future and will start their journey, my lad who is 16 has his phone welded to his hand! Heād use app based banks, Iām not sure heās ever been to a branch and if he banked with an app bank probably never would.
The survey from MasterCard is flawed, none of the app banks have really got going and have a full bank offering yet. Wait another 2 years and ask again, the answer will be totally different.
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Anarchist
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I think most people would only switch banks of they had a bad experience with their current bank, or if they thought they would be financially better off at another bank. Clearly there are other reasons to switch, branch closures among them, but switching is perceived as potentially problematic.
Iāve talked to friends and family about Monzo, and the general opinion is ānice, but not important.ā The sticking point is that apart from free overseas transactions, which are available elsewhere for those who want it, the only pull factor is the fancy app and reported good customer service.
Once the CA is fully rolled out, I think Monzo will need to work on banking features to pull people in. They are competing against huge advertising budgets, after all
Yup. Especially when people last opened or moved a bank account before the Current Account Switch Service launched and you had no option but to move all of your activity manually.
I was with the same bank for over 20 years because once my account was opened and I had everything going through it, changing didnāt feel like an option. The mental risk/reward ācaculationā didnāt stack up for me, it always came back to āWhy would I go through the hassle of changing when it works now?ā
What changed for me initially was I started using the Monzo pre-paid card. I really liked how it worked and, looking ahead to how I could move over in the future was when I first learned about the Current Account Switching Service. Also around that time, I actually went back and had a closer look at my current account Iād had over 20 years and realised that for the past two years it had been offering me absolutely nothing in terms of added value, with the various benefits and inducements having been slowly stripped away or watered down. It was quite a shock when I realised at that point they were literally doing nothing other than holding my money for me.
As the Monzo current account still wasnāt on the horizon at that point, I investigated current banking options and switched to First Direct, who offered me a lot more than my previous bank straight out of the gate.
Going forward I donāt know when or even if Iāll switch to the Monzo current account completely as I now have some other linked First Direct accounts to help make better use of my money. In the medium term Iāve been transferring an āallowanceā to Monzo every month and using it as my daily spending card, which is working for me so far. In a year or two, especially when the Monzo marketplace options are up and running, Iāll re-evaluate things.
tl;dr was with same bank for 20 years before using Monzo beta directly led to me switching to a different bank account.
This makes me ponder what the minimum customer base would be to ensure Monzoās survival in the medium to long term, and what model they have contemplated to ensure that they turn a profit. The British public are typically willing to put up with bad customer service for a long time without doing anything about it, and whilst some people are happy to regularly switch their energy supplier, savings account, etc., most stay with the same companies for years if not for decades.
An example close to home is my 23 year old daughter, who tends to spend money without thinking and who has regularly incurred overdraft charges in the past. She lives on her iPhone and in theory should take to an app based bank like a duck to water. However, she feel she needs to have a āproperā bank account (HSBC), and is so far resisting my attempts to persuade her to switch.
There will always be people like us who enjoy technology or just like trying something new, who like being an āearly adopterā and donāt mind taking a bit of a risk. If enough of us sign up to banks like Monzo and Starling to make them viable then thatās great, and we can enjoy the cutting edge technology and new features whilst others plod on with their legacy accounts. I never thought that I would ever get excited about banking, but I am genuinely interested in how Monzo develops, regularly open the app for no particular reason and find myself doing manual app updates on Google Play far more than I ever used to, just in case some exciting new feature has slipped out!
Once Monzo has a full current account open to everyone to signup, the offering will be much more appealing than the current ājoin a queue and weāll let you try it in a few monthsā. It should have some of the network effect the prepay card had with the card appealing to friends of existing Monzo users as they show how easy it is to use, the instant notifications, pots and so on.
I would expect the current account user numbers to take a chunky one-off hit compared to the prepay card as not everybody who signed up to the prepay card will be motivated to get a full account. On the flipside, there will no longer be a āĀ£100 minimumā which may have put people off prepaid but encourage them to try the current account. I would still expect the numbers to grow steadily next year, particularly as more and more enhancements are made to the offering. Iām guessing weāll have a clearer idea of how Monzo sees user number developing at the next crowdfunding round in the coming months.
The only think Monzo offer that my legacy bank doesnāt is instant notifications. You could make arguments for UI/Customer service but I never needed CS and I never spent long enough in Legacy app to look at the UI.
The goal of Monzo as a financial hub makes tons of sense and would encourage lots to switch but really, if all you do is pay out a few DD a month and receive your salary in your account. Then you really donāt get much extra from Monzo/Starling at the moment
That is quite a sensible outlook. At the moment, neither Monzo nor Starling is in a position to compete properly with legacy banks.
Sure, theyāve both got interesting plans and talented developers. Thatās no good if the debit card is unreliable. Until theyāve got the basics sorted you can stick as many energy switching offers in the feed as you like, you wonāt entice people to switch.
