UK consumer confidence over innovation in banking, payments still tepid - survey

Research indicates that 74% of respondents see themselves still banking with a traditional high street bank two years from now. Only 16% of UK adults are likely to consider banking with a challenger bank within the next two years, up from 13% in 2014, according to www.out-law.com. In addition, 18% of those involved in the survey claimed they would consider banking with a payment service provider like PayPal, as compared to 24% who indicated such a willingness in 2014.

Many consumers are reluctant to initiatives backed by the UK government or EU policy makers on current account switching, open data and new payment services, the same source indicates. Thus, 60% of UK adults are either not very likely or not at all likely to use banking APIs that the UK government is in the process of finalising standards for. The use of APIs in banking would enable customers to access transaction and other bank account data and share it with third party businesses.

Innovations being facilitated by reforms to EU payment services laws also lack popular support. According to research, 56% of UK adults said they would not consider using an app or service that aggregated financial information from across all their financial services providers, despite the new Payment Services Directive (PSD2) being framed in such a way to promote such innovation by account information service providers (AISPs). Many consumers (42%) would not consider using the services of payment initiation service providers (PISPs) either, the study found.

The YouGov survey of 2,092 adults was commissioned by Pinsent Masons, the law firm behind legal news and information website Out-Law.com. YouGov is an international internet-based market research firm, headquartered in the UK, with operations in Europe, North America, the Middle East and Asia-Pacific.

The results from the Pinsent Masons-backed survey follow recently published statistics which show that from July 2014 to the end of June 2015, there were 1.1 million current account switches in the UK. According to Pinsent Masons, this was only a marginal increase on the year before and still some way below expectation.