In Europe, digital-native challengers like neobanks and direct banks are reshaping buyer expectations by providing seamless, user-friendly digital experiences, which conventional banks usually fail to match.
A brand new survey by Backbase, a Dutch banking software program fintech firm, revealed that just about half of conventional financial institution clients can be extra glad with enhanced digital companies, with clients more and more demanding customized monetary instruments, simplified monetary administration instruments, and improved app assist experiences.
The survey, which polled greater than 6,300 on-line banking customers throughout 13 European nations, explored client preferences and behaviors associated to digital banking, funding habits, and satisfaction ranges. It discovered that digital choices by conventional banks usually fall in need of buyer expectations, with many purchasers indicating that enhancements would considerably improve their satisfaction.
Almost half of respondents (47%) mentioned they’d be extra glad if their financial institution provided extra digital companies. This sentiment is especially sturdy amongst clients of conventional banks (48%), in distinction to 40% of direct financial institution clients and 38% of neobank clients.
Neobanks are digital-only banks that leverage revolutionary expertise to supply streamlined and sometimes area of interest monetary companies. Examples in Europe embrace Revolut, Bunq, and N26. Direct banks are banking establishments which function with no bodily department community. These banks supply their companies solely by way of the Web, cellular app, e-mail, and different digital means, akin to phone, on-line chat, and cellular verify deposit, specializing in ease of use, value effectivity, and self-service.
Notably, a good portion of shoppers reported switching banks attributable to dissatisfaction with service high quality, illustrating the pressing want for banks to modernize buyer expertise or danger shedding customers to digital-first challengers.
26% of respondents mentioned that they had already modified banks because of this and can be keen to take action once more. Moreover, round 10% are at the moment planning to modify suppliers attributable to continued dissatisfaction with the service provided by their most important financial institution.
Enhanced digital companies and new affords
The survey additionally confirmed that clients more and more anticipate banks to transcend conventional choices, and ship customized and seamless digital experiences.
Particularly, 59% of respondents need tailor-made monetary suggestions based mostly on their particular person wants, reflecting a rising demand for intuitive banking experiences; 57% anticipate banking apps to detect worldwide journey robotically and allow funds and money withdrawals overseas; 52% need fast solutions to easy questions by way of built-in in-app chat options; and 50% need instruments to handle subscriptions, together with the flexibility to cancel companies like Netflix or Spotify.
Clients are additionally searching for options that simplify monetary administration and which combine seamlessly into their lives.
47% need the flexibility to use for merchandise like loans or bank cards digitally; 41% need apps to show close by ATMs; 28% need spending analyzers and actionable insights; and 18% need digital funding choices built-in into banking apps.
These findings spotlight win-win alternatives for banks to spice up income, particularly with merchandise together with digital lending and digital investments, whereas additionally bettering comfort.
The European monetary panorama has modified drastically over the previous years, with money utilization plummeting and digital funds gaining in prominence. The 2025 Funds and Open Banking Survey by Technique&, the worldwide consultancy of PwC, revealed that solely 23% of the 5,500 European customers polled in 2024 most popular money.
The determine represents a major decline from 2022 (37%), and 2018 (43%). On the identical time, choice for digital and digital cost strategies elevated, with cost playing cards rising 16 factors from 46% in 2018 to 62% in 2024, and digital wallets rising 4 factors throughout the identical interval.
Demand can be rising for open banking, with 63% of European respondents reporting willingness to share their banking information in alternate for advantages together with reductions or extra companies. In Germany, half of them indicated being. open to an open banking mannequin.
Although digital-native challenger banks are gaining floor in Europe, conventional banks proceed to dominate the sector. Of the 6,300 on-line banking clients surveyed by Backbase, 82% recognized a conventional financial institution as their most important banking supplier, whereas 13% indicated a direct financial institution, and a mere 4% named a neobank.
Featured picture: Edited by Fintech Information Switzerland, based mostly on picture by RSplaneta by way of Freepik
