New research from fintech organisation Contis has stressed that high street banks must ‘innovate or die’.
The report found that 25% of UK consumers feel the traditional high street bank will be ‘dead’ within five years. Indeed, 40% of millennials either said that physical high street branches have either already had their day, or will disappear by 2025.
The report pointed to changing consumer expectations, in particular regarding technology, with 68% of consumers saying they want the same level of digital services from larger banks currently provided by challenger banks such as Monzo.
The research was done by Censuswide for Contis, and involved surveying 2,000 consumers. The report has been put together ahead of Money20/20 Europe, where Contis will exhibit.
Based on the research, Contis has strongly advised traditional banks to innovate fast, and says this can only be done through partnership with fintechs. This way, they will be able to meet increasing consumer demands, without having to invent all the technology from scratch and replace their cumbersome legacy systems.
Speaking exclusively to FinTech Magazine, Contis CEO Flavia Alzetta said that these partnerships should be embraced and can be mutually beneficial. “It is well documented that banks are challenged by legacy technology, infrastructure and culture; fintechs aren’t. FIntechs are legacy free, API-driven and agile, creating solutions that are configurable and flexible,” she explained. “High street banks benefit from a heritage of trust, so combining this with forward-thinking, innovative fintech should be a partnership they all consider.
“Open Banking has been a great enabler to make this a possibility. Consumers demand choices of how and when they manage their money, increasingly digitally and always in a secure and reliable environment. Fintechs have to work to strict regulatory and compliance standards, but without the constraints of systems and procedures so can deliver solutions much more quickly.”