90 per cent of Scots worried about bank branchless high streets by 2023

Michal Kissos Hertzog

The research, commissioned by Pepper, the mobile bank created by Israeli lender Bank Leumi, also found over a quarter (31 per cent) of Scottish consumers expect big technology companies, like Google and Amazon, to offer high street banking services within five years.

If the tech giants do indeed jump into banking, it will be in light of a huge shift in consumer behaviour, as more and more bank online. As of 2017, the Office of National Statistics (ONS) estimates 63 per cent of the UK population uses internet banking services.
 
Despite these deep fears about how they will bank in the future, and only ten years since the financial crisis, the survey highlights the fact that Scots have a high level of trust in their bank branch and prefer more traditional ways of talking about their finances such as face-to-face (71 per cent). Yet, in a climate where about 60 bank branches in the UK are closing every month, it also highlights the future of what the high street bank will look like. Instead of offering everyday services, which will be done by digital-only banks, brick and mortar branches will offer customers more professional and complex services.
 
The number one reason given for such a high level of trust is because high street banks have “been around longer” (48 per cent) and have built a long-term relationship and experience with consumers, while almost two thirds (60 per cent) are satisfied with the service they get from their brick and mortar bank.
 
When asked why they don’t bank with a digital-only bank, the biggest reason given by Scottish consumers is that they want to speak to someone in person (63 per cent), with 18 per cent also saying that switching banks is a “hassle”.
 
However, consumers in Scotland admit they’d be tempted to switch if offered a monetary reward (39 per cent), provided with all the services a high street bank offers (23 per cent) or given more information about digital banks (22 per cent).
 
It isn’t a completely rosy picture for high street banks in Scotland though, as consumers want convenience, which is not always on offer from high street banks, due to limited opening times and weekend closures and their online services still developing. 
 
Despite consumers valuing face-to-face meetings when dealing with their bank, they do have a clear wishlist of what services and features they want from their banks right now.
 
Number one is to be able to speak to their bank over a video call, or send messages, like on WhatsApp, (33 per cent) and the ability to open an account without visiting a branch (21 per cent). However, these services and features are already widely available with several digital-only banks. 
 
Michal Kissos Hertzog, CEO of Pepper, said of the research: “It is clear that high street banks in Scotland have an advantage due to the high level of trust that they’ve built up with consumers over a long period of time. Yet banks can’t just rely on ‘trust’ to keep customers in the future. Instead, collaboration between banks and fintechs can make sure they can take on the tech giants once they jump into banking.” 
 
“This research shows that Scottish consumers are very open to using technology and new products and solutions to replace many of the things they like about their local bank branch, because they want convenience. But convenience is not only regarded as flexible opening hours, but also state-of-the-art, fully transparent, accessible and fair account management.”
 
“The challenge facing high street banks in Scotland is big, especially when needing to compete against major tech companies in the future. Banks need to improve and offer the best and most convenient, simple, smart and personalised digital services to meet changing consumer demands. They can’t create just another banking app; instead, they need to build a whole new banking experience. This will be how banks will not only survive - but also thrive.”