Nearly half of young people would consider switching to a different bank in order to receive a better digital banking experience.

This is according to software company Mulesoft, which has investigated consumers’ attitudes to digital banking. For a new report, titled Customer Experience and the Connectivity Chasm, Mulesoft surveyed 9,000 consumers, and the results suggest that traditional banks may not be meeting customer expectations when it comes to digital offerings.

This could be costing banks customers, with 49% of consumers aged 18-34 say they have switched or considered switching banks in the last 12 months in order to receive a better digital experience.

Although incumbents are now working to improve their applications for customers, the rapid rise of fintech and challenger banks has meant that they often lag behind when it comes to providing a connected, personalised experience and innovative banking products.

This suggests that good digital services trump loyalty to a particular bank, particularly for younger customers. For those who have switched or have considered switching, dissatisfaction with their current provider, ease of opening an account and wanting a better mobile experience are the top reasons for doing so.

According to Mulesoft’s research, 55% of consumers feel that they currently receive a disconnected experience from financial services providers, suggesting many banks may not be recognising the importance of operating across different channels and knowing customers preferences.

Danny Healy, financial technology evangelist at MuleSoft said:

“These findings are a clear warning that banks that fail to deliver connected experiences risk damaging customer loyalty and worse losing business to other providers who can meet these expectations.

“With a growing number of consumers valuing the convenience of connectivity, traditional players must prioritise speeding up and simplifying their services. By building application networks using APIs, banks can unlock data from siloes and integrate legacy systems with new technologies. This API-led connectivity approach will empower banks to truly enhance the customer experience.”

Personal data and digital banking

The research also revealed that many consumers are willing to exchange personal data for a more personalised experience. Due to open banking regulations, banks are now required to give third parties access to customers’ financial information, assuming they have given their permission.

61% of 18-34-year-olds said they would be willing for their data to be shared for personalisation, compared with 32% of consumers over 55.

Healy believes that banks should be willing to collaborate to offer better digital services:

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“Personalised experiences are highly valued among consumers, and consumers are willing to share more information to receive better services. This willingness is paving the way for open banking to truly take off, but many banks have yet to fully embrace the opportunities that are available to them.

“To maximise the potential of open banking and meet the demand for better digital experiences, banks must build an application network using APIs to collaborate with third parties, unlock siloed customer data and innovate faster. With this approach, banks will be able to harness open banking to deliver the personalized and digital experiences that customers crave.”


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