It usually goes without saying that increased competition means better service and products, so why aren't more people welcoming the Government's proposition of new high street bank branches?
New banking licenses are in the process of being considered and awarded, so you could soon see some new names cropping up in your town or city. It is hoped that these new licenses will see the sector increase in size and in turn there will be an increase in competition. However, the British public are remaining very pessimistic about the possible new additions with 57% not expecting it to have any impact on the quality of goods available, according to findings from PR firm Weber Shandwick and ComRes.
Just 12% of those questioned would actually welcome an increase in the number of banks on high streets and only 26% of those would then actually consider changing to one of these new banks, despite the fact that switching accounts has never been easier.
Liz Wolstenholme of Weber Shandwick, said: "The new players in the financial services sector have their work cut out for them. Indifference and confusion among the British public are the greater forces at work, and this research shows brands need to adopt new rules of engagement.
"Our 'classic' brands are increasingly behaving like challengers, making the case for consumers to stay with their existing bank that much stronger. We know major banks are adopting what's traditionally been described as a challenger model, offering online services with increasingly sophisticated user experience."
Consumers clearly understand the need for more choice, with 59% believing new bank branches would lead to an increase in competition, but it seems to be a lack of knowledge about the banking sector that is leading 21% to be unsure that this will actually have an impact on the services available to them.
Confidence and trust also play pivotal roles in banking with just about the same number of people agreeing and disagreeing (35% vs 36%) whether a greater deal of competition will help rebuild trust in the financial services sector.
Weber Shandwick's Mary Whenman, added: "The financial services market continues to be fast-moving and dynamic with huge opportunities available. The onus is now on bank brands themselves, 'challenger' or otherwise, to find new ways to engage with consumers, giving them a compelling reason to stay or switch. CMOs need to lead the way in driving innovation and engagement with existing and potential customers."
With so many people turning to technology to make life easier these days, it seems the banking world is no different with 72% of those who would not welcome an increase in the number of high street branches saying this is because they expect to do their banking online.
It's a positive step that so many people are embracing technological advances, but there will always be those who feel more comfortable speaking to somebody face to face. We increasingly hear about high street businesses closing and the scare of "ghost towns", so surely this move from the banking sector is something to be celebrated.
Perhaps it comes down to the industry to gain the trust, as well as to educate, people on the benefits of what the traditional high street bank can offer, and then we can all enjoy good service and innovative products when it comes to a safe home for our money.
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