Incumbents continue to be perceived as the safer choice among customers; challengers keep trying
- People seem to feel safer with incumbent banks.
- Challenger banks keep working to gain trust.
It seems that when it comes to gaining user trust, incumbent banks remain at the top. 82 percent of customers reported being totally happy with their incumbent banks, according to an EPAM survey of over 4,500 consumers in the U.S., U.K., Hong Kong and Singapore. And when those surveyed were asked what would stop them from switching to a new bank, 35 percent reported trust as a main reason.
Challenger banks haven’t been around long enough to get the instinctive trust a long-existing brick-and-mortar bank gets. Covid-19 has increased people’s financial anxieties, another obstacle challenger banks need to reckon with.
But challenger banks continue to focus on ways to circumvent this problem.
German challenger bank N26, which just got permission from the Brazillian Central Bank to start lending there, continues to rely on a simple app experience to make up for a lack of face-to-face experience.
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