2020 UK Retail Banking Survey

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The UK’s retail banking sector has over 300 banks and 45 building societies, equating to a grand total of 9,000+ branches, yet the Big Four banks (HSBC, Barclays, NatWest/Royal Bank of Scotland and Lloyds Banking Group) still manage over 75% of customer bank accounts in the UK, 85% of business accounts and more than £5 trillion in total assets.

To find out how the opinions of consumers fare in today’s rapidly changing banking environment, we carried out a survey of over 2,000 consumers in the UK, from a range of different generations and regions, and pinpointed a number of crucial insights into the sector.

For instance, we discovered:

Executive summary

Neobanks like Monzo and Revolut have dominated news headlines in recent months, which perhaps explains why older generations are significantly more aware of them than younger generations, but this could soon change.

In previous years, these neobank newcomers have thrived off of guerrilla marketing and word of mouth campaigns - take Monzo’s elusive coral cards that created an air of mystique younger consumers found irresistible. However, as neobanks continue to up the ante on the marketing front by targeting mainstream audiences, awareness levels could rapidly change.

And, as our survey discovered, many consumers are open to switching over to these neobanks on a permanent basis if they can offer them more than the likes of the Big Four.

While increased competition might create chaos for those who hold the reins, it’s also the main driver of innovation. In the years that lie ahead, banks that listen to the needs of their customers, and seek to innovate at every touchpoint, will stand to gain the most.

CEO and Co-Founder at Qudini Imogen Wethered

When looking at today’s retail banking sector, it would be remiss not to acknowledge the increase in competition that’s hit the market over the last decade; Metrobank, the Spanish-owned Santander, and a flurry of neobanks. Yet, while this fresh competition was supposed to break the dominance of the Big Four, the Bank of England has introduced a number of regulations that are supposedly holding them back from reaching growth.

Today’s political and economic uncertainty has already left a dent in the revenues and profit margins of the retail banking sector. For some, not-so-fond memories of the 2008 financial crisis that saw the likes of banking giant Northern Rock fall to its knees will come rushing back to them; for others, the opportunity for innovation has never been brighter.

• What Big Four bank is the most well-known - and who holds the keys to effective brand and marketing, in-branch experience, online banking and customer service

• What bank has the best customer service (hint: it’s not one of the Big Four)

• The bank with the best overall customer experience and service

• Who the most relevant bank is to modern consumers

• Neobanks may be niche, but they’re gaining momentum, and fast...

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About our survey:In August, 2019, we surveyed 2,001 consumers that were 16 years old or older from across 11 different regions throughout the United Kingdom about their relationships with retail banks. This included East of England, Greater London, East Midlands, West Midlands, North East, North West, Northern Ireland, Scotland, South East, South West, Wales and Yorkshire and the Humber. We classified Generation Z as being between 16 and 23 years old, Millennials as being between 24 and 37 years old, Generation X as being between 38 and 53 years old, Baby Boomers as being between 54 and 72 years old, and the Silent Generation as being 73 years old and older.

Key findings:1. The most well-known bank is Barclays,

with 79% saying they’ve heard of them

2. 47% of Baby Boomers and 49% of the Silent Generation have heard of Monzo, compared to only 29% of Gen Zers and 36% of Millennials

3. Barclays was voted the strongest and most relevant bank

4. 64% said Halifax has a ‘Good Customer Experience’

5. 8% of all survey respondents have a neobank account

6. 14% of all respondents are considering using Monzo or Revolut as their primary bank

7. One in five of all Millennials are considering using Monzo/Revolut as their primary bank

8. Just over a quarter of Monzo and Revolut current customers use them as their primary bank provider

9. 42% of Monzo and Revolut customers are strongly considering making them their primary bank

10. 10% of Gen Zers and 8% of Millennials don’t bank with anyone

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Barclays had the highest number of customers in our survey, with just under one fifth (19.1%) saying they have an account with the bank. Halifax, a banking division of Bank of Scotland, which in turn is owned by Lloyds Banking Group, occupied 15.9%, followed closely by Lloyds at 14.8%. Santander took a 14.8% stake, which was followed by NatWest (and RBS) at 13% and HSBC at 10.7%

On a generational level, Barclays had the highest percentage of customers across all generations besides Gen Xers, who were equally as likely to be customers of Halifax.

Barclays also had the highest level of brand awareness, with 79% of respondents saying they’d heard of the bank before. Lloyds, NatWest and HSBC followed closely in suit, lagging only one to two percentage points behind.

Our study also revealed that older generations are significantly more aware of banks than their younger counterparts. Barclays was the most well-known with Gen Zers and Millennials, at 60% and 66% respectively. Generation X were just as likely to have heard of Barclays as they were Lloyds, at 82%. Barclays was also well-known with Baby Boomers, at 92%, and the Silent Generation had the highest awareness levels overall, with 97% equally as aware of Lloyds, Halifax and Santander.

But it wasn’t just reach and awareness that saw Barclays dominate - the bank also received the highest percentage points for its brand and marketing, in-branch experience, online banking and customer experience.

Brand and marketing

The bank said to have the strongest brand and marketing presence was Barclays, followed closely by Halifax and Lloyds. From a generational standpoint, this sentiment was true for Millennials and Baby Boomers, while Gen Zers and Gen Xers said Lloyds had the strongest brand and marketing. The Silent Generation cast their vote in NatWest and HSBC’s direction.

In-branch experienceBarclays had the highest scores for in-branch experience overall, followed by Lloyds and Halifax. Barclays’ in-branch experience was the most favored by Gen Zers, Millennials and Baby Boomers, while Gen Xers said Lloyds and the Silent Generation said HSBC.

Online bankingBarclays had the best online banking experience overall, followed by Halifax and Lloyds. This opinion was shared by all generations except the Silent Generation, who preferred NatWest instead.

Customer serviceBarclays had the highest general customer service overall, followed by Halifax and Lloyds. This opinion was shared by Gen Zers, Millennials and Baby Boomers, while Gen Xers and the Silent Generation preferred Lloyds.

Qudini UK Retail Banking Survey

The Big Four are known for dominating the lion's share...It seems the Big Four banks are equally known for dominating the lion’s share of the retail banking market, making it near impossible for any newcomers or smaller competitors to muscle their way in.

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Barclays (79%)

Lloyds (77%)

Halifax (77%)

NatWest (77%)

HSBC (77%)

Santander (75%)

TSB (72%)

Cooperative (64%)

Virgin Money (59%)

MetroBank (50%)

Monzo (40%)

Standard (31%) Chartered

Coutts (29%)

Starling (28%)

Atom Bank (26%)

Revolut (18%)

None of the above (4%)

Silent generation (73+)

Baby boomers (54-72)

Generation X (38-53)

Millennials (24-37)

Generation Z (16-23)

0% 25% 50% 75%

Which of the following banks/financial services companies have you heard of? (Tick all that apply)

(Overall %)

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When asked which bank they think is the strongest and most relevant, Barclays was the most common answer, with 39% of all survey respondents stating that this was the case. This was followed by Lloyds and Halifax, which were both at 32%.

This opinion was shared across all Generations except the Silent Generation, who cast their vote Santander’s way.

When asked which bank was neither strong nor relevant, Cooperative was the most mentioned. This sentiment was shared by all generations, and increased significantly with age.

When asked which banking brand had a ‘good customer experience’, Halifax received the highest percentage points overall, at 64%.

The Silent Generation were particularly big supporters of the bank, with 82% sharing this opinion - a stark contrast to Gen Z’s 49%.

Millennials and Gen Zers were more likely to believe Barclays’ customer experience was the best, at 52% and 57% respectively. NatWest had made a particularly positive impression on Gen Xers, with 66% casting their vote in NatWest’s direction, while Baby Boomers were more likely to say Lloyds, at 72%.

Barclays is the strongest and most relevant

Halifax come first on the customer experience front

In today’s fast-paced and rapidly changing business environment, embracing digital innovation and changing consumer demands is imperative to remaining relevant with modern consumers.

While there might be more communication channels than ever before, consumers still want a thorough yet speedy customer experience - whatever channel they choose to engage through.

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Out of all the banks mentioned in our survey, Barclays seems to have nailed down the experience the best. Of all respondents who had visited a bank branch in the last two years, Barclays received the highest percentage score for its branch experience and service, with 29% saying it was excellent or very good.

This opinion was shared across all generations, with 40% of Gen Zers, 38% of Millennials, 28% of Gen Xers, 22% of Baby Boomers and 32% of the Silent Generation saying Barclays’ in-branch experience was excellent or very good.

Santander, on the other hand, was voted as having the poorest experience, with 6% saying its in-branch experience was “extremely poor”.

Barclays scores big for its in-branch experienceBanks have made a big effort in recent years to modernize their in-store experience, incorporating everything from electronic kiosks and appointment scheduling software through to in-branch cafes and free wifi.

Silent Gen

Baby Boomers

Gen Xers

Millennials

Gen Zers

Overall 16%

16%

20%

18%

14%

17%

13%

15%

13%

16%

14%

14%

13%

13%

12%

16%

13%

11%

Strongest in branch experience

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Barclays (19%)

Halifax (16%)

Other (16%)

Lloyds (15%)

Santander (15%)

NatWest (13%)

HSBC (11%)

TSB (6%)

I do not bank (4%) with anyone

Monzo (4%)

Cooperative (3%)

MetroBank (2%)

Virgin Money (2%)

Starling (2%)

Revolut (2%)

Silent generation (73+)

Baby boomers (54-72)

Generation X (38-53)

Millennials (24-37)

Generation Z (16-23)

0% 5% 10% 15% 20% 25%

Who do you bank with?

(Overall %)

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Out of all our survey respondents, 4.2% had an account with Monzo, 1.8% had an account with Starling, 1.5% had an account with Revolut and 0.5% had an account with Atom Bank - accumulating to a grand total of 8.1% of all survey respondents. Monzo had a particularly high adoption rate amongst younger audiences, with 8% of Gen Zers and 6% of Millennials saying they have an account.

Although not quite on the same scale as the Big Four, awareness levels for neobanks were relatively high. Out of all the challenger banks, Monzo had the highest brand awareness, at 40% overall, followed by Starling at 28%, Atom Bank at 26% and Revolut at 18%.

Neobanks are still niche, but they’re gaining momentumFresh newcomers like Monzo and Revolut have caused quite a stir in the banking community as of late. By replacing physical branches with a strong online or mobile app presence, neobanks have been eagerly adopted throughout the UK.

Surprisingly, older generations were more likely to have heard of challenger banks than their younger counterparts. For instance, 47% of Baby Boomers and 49% of the Silent Generation have heard of Monzo, compared to only 29% of Gen Zers and 36% of Millennials. This trend carried across Starling, Atom Bank and Revolut.

Neobank brand awareness levels

40%

28%

26%

18%

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And while these neobanks now have huge customer bases, the majority still use their neobank accounts as add-ons to their existing bank accounts with more traditional providers. Of the 6% of respondents who are customers of Monzo and/or Revolut, only 26% said they use it as their primary bank.

Younger generations are considerably more likely to use these banks as their primary providers, with 31% of Gen Zers and 36% of Millennials saying this was the case. This percentage drops significantly for older generations, with only 14% of Gen Xers and 9% of Baby Boomers saying they currently do.

Just under a third (32%) were adamant that they would always use a traditional bank as their primary provider, however, this could soon change as neobanks continue to earn the trust of their existing customers. A significant 42% of Monzo/Revolut customers said they are strongly considering using these banks as their primary providers. This was particularly true for respondents from Greater London, Norwich, Newcastle, Leeds and Edinburgh.

Gen Xers and Baby Boomers are more likely to say they will always use a traditional bank in addition, at 46% and 45% respectively. This was also the case for female consumers with a Monzo or Revolut account, with 40% saying they would always use a traditional bank in addition, compared to only 23% of males. 

Almost half of Monzo and Revolut customers consider switching permanentlyThe increased popularity of neobanks like Monzo and Revolut arguably comes down to their flexibility. They are easy to obtain, even easier to use and offer a number of innovative digital features that allow users to keep track of their day-to-day spending.

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The second most common response holding respondents back from switching to a neobank permanently was their lack of branches, with 22% saying that it was off-putting. This was particularly true with respondents from the Silent Generation, with 30% saying this was of concern, while Gen Xers were the least likely to see this as an issue, with only 18% agreeing with the statement.

Others expressed concerns about the stability of Monzo or Revolut, with 17% saying they don’t think they’re stable enough to be sole banking providers.

However, out of all the respondents, 14% said they’re considering using Monzo or Revolut as their sole provider - and this figure jumped up to 20% when looking at Millennials alone. Only 8% of Baby Boomers and 1% of the Silent Generation said the same.

Is awareness the only thing that’s holding back the neobanks?A lack of awareness was the number one reason why our respondents wouldn’t use a neobank as their sole banking provider. When we asked all of our respondents - those with and without a neobank account - if they would ever consider switching their account to Monzo or Revolut, 32% said they’ve never heard of them.

Why don’t you use one of the neobanks like Monzo or Revolut as your primary bank provider?

Never heard of them 32%

I wouldn’t want to use a bank without branches 22%

I don’t think they are stable enough 17%

I am considering it 14%

I don’t think they can support enough of my banking needs 11%

I don’t think they offer the customer service I would want 10%

I don’t know 10%

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From a customer experience standpoint, the bank considered to have the best overall customer experience and service was Barclays - it was also voted the most relevant.

Despite their comparatively low adoption levels, neobanks are quickly gaining momentum in the retail banking sector. Compared to older generations, younger consumers are considerably less aware of neobanks, but as these awareness levels rise over the next few years, and as neobanks continue to infiltrate and appeal to younger consumers, adoption rates will most likely increase.

We will also most likely see the number of consumers using neobanks as their primary provider increase as a relatively high number of Monzo and Revolut customers (and non-customers) are already considering making the switch.

Overall, these survey results indicate that modern consumers are big on customer service and experience, both in its traditional and digital forms. The banks that can provide a time-efficient service with a human touch across all channels will stand to gain the upperhand.

Conclusion: Banks need to blend efficiency with a human touchWhile the Big Four banks still dominate the UK market, our survey revealed that Barclays is the most well-known and has the best brand and marketing, in-branch experience, online banking and customer experience. However, out of all respondents who had visited a bank branch in the last two years, Halifax was voted as having the best customer service.

Time-effi cient

Human touch

QudiniWe help retail banks increase profitability and ensure lasting brand relevance through superior customer experiences, advanced branch operations and game-changing business intelligence.

Qudini’s pioneering solutions include:

Appointment Scheduling

Wait Line Management

Event Bookings

Staff Task Management

Branch Floor Management

Business Intelligence

Win the banking revolution

Retail Choreography

How Qudini benefits retail banks:More footfall: Doubling appointment booking traffic for video bankers and community personal bankersGreater productivity: 50% reduction of admin time in managing appointmentsIncreased retention: 20% reduction of walkouts in-branch Better resource allocation: due to insights on what customers need and whenDigital education: 16% increase in in-branch apps downloaded.

Qudini works with the world’s leading retail banks and retailers, including NatWest, Royal Bank of Scotland, Standard Chartered, Samsung, O2, IQOS, Tui, L’Occitane and Brown Thomas

Let’s talk

info@qudini.com

Read use cases, case studies and ROI at: qudini.com/industries/retail-banking