A quarter believe High Street banks will be dead by 2024

A quarter of UK consumers believe the High Street bank will be ‘dead’ within the next five years, according to new research.

A survey of more than 2,000 UK consumers by banking and payments solution Contis also found that attitudes to the future of the traditional banking model are even more pessimistic amongst younger generations, with 40 per cent of Millennials (those aged 25-44) believing that the High Street lender is already dead, or will be within the next half-decade.

However, whilst many have already opened an account with a challenger bank, 68 per cent said they would demand access to the same level of digital services - such as app-based banking offered by challengers - from all banking providers, including established players.

The research showed that despite rising expectations, incumbent banks still have a legacy of trust that can buy them time to catch up with the technological developments of the new challengers, with 60 per cent saying they trust High Street lenders, compared to less than a third (30 per cent) trusting the so-called 'neo-banks'.

However, it is unclear how long this will last, with just a under a quarter of consumers (22 per cent) saying they would like to manage money entirely digitally, in apps or online, and nearly a third wanting to use digital payment methods for everything they can (31 per cent). As a result, half of those surveyed would still consider switching.

Despite mounting evidence that Big Tech players are moving into the banking and payments market, with Facebook’s reported entry into digital payments by 2020 and Apple’s launch of its own card service this summer, consumers do not yet trust Silicon Valley brands to provide banking services, with a third saying they welcomed it, versus 48 per cent saying they were not yet convinced. Just over half (54 per cent) of Millennials said they felt some positivity towards the idea of banking services provided by BigTech providers.

Flavia Alzetta, chief executive of Contis, said: “Established banks need to quickly embrace the innovations pioneered by challenger banks who are fast changing the expectations of consumers - High Street banks need to listen and innovate, or die, and time is of the essence.”

She said the way forward for traditional banks was increasingly in partnership with nimble FinTechs which are not constrained by legacy technology, systems, infrastructure or culture.

"Open Banking has enabled new customer-centric businesses to develop new features and technology, powered by APIs for quick legacy-free integration.”

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