We as consumers, and like-wise business customers, usually remain with the same bank from the cradle to the grave. Changing banks is one of those chores in life that seems too much of an effort. Even when they cheese us off and get things wrong. The advent of switch in seven days has helped this as the banks have had to take responsibility for making it all happen. Gone are the days when you – the customer – had to call up and switch all your direct debits over. Recent years have brought enormous change which is impacting the traditional banks we use.
The departing chief exec of Royal Bank of Scotland Ross McEwan took some stick in the press when he closed Scottish branches. But, he was right to do so. It wasn’t simply a cost cutting exercise, albeit I am sure it will help the balance sheet. No, banking is changing – and will change beyond all recognition in the next 20 years. Not just in the boardroom either, with the potential appointment of Alison Rose as the new female CEO at RBS, but in how we bank, as new challenger banks arrive at a smartphone near you. Will you be brave enough to switch?
It seems the younger generation are already at ease with these digital banks. One in four people under the age of 37 – those in so-called Millennial and Generation Z demographics – are using digital-only challenger banks. Some 14 per cent of UK bank customers across all age groups have at least one mobile-only digital banking provider – with up to a third of under-37s having two or more accounts with challenger banks. So, while the digital banking phenomenon may be new, it has already been adopted by millions, with more set to join up. These people are the future. Hence, why Mr McEwan was correct in his decision.
So what is all the fuss about? I can report from personal experience here. I still have my RBS account and credit card, but I use digital bank Monzo also. There are many digital banks to choose from; I liked the colour of the Monzo debit card and that was as scientific as I got in choosing my new banking adventure.
The sign up process is a joy. It is easy, user-friendly and the system works. The debit card arrived on time and was personal to me. I felt that I had indeed joined a new club as opposed to a bank. The app is awesome. Yes, I did use that word – awesome – as it feels and acts light years ahead of what I have been used to. I can customise the screen and add in my own picture naming my account. But the best bit is still to come…
Whenever someone or something deposits cash into my account, the Monzo app sends me a “ker-ching” notification with party balloon emoticons. How cool is that? It breaks down how I am spending my money into buckets that I can again personalise. And so, the fun goes on, culminating in friendly online customer chats that are all about problem solving, not “computer says no”.
Monzo is just one mobile digital bank that, while embryonic, is making headway. Atom, Pockit and many others are challenging the old status quo of banking via branch networks. They have a long way to go before they can match the big boys who offer loans, many other financial products and, of course, business banking.
Alas, this new form of banking which may still feel strange to many is chipping away at and changing the men-in-grey-suits image of traditional banking.
- Jim Duffy MBE, Create Special