# Traditional banks need an overhaul
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-09-28
Category: BANKING
Category URL: https://financedigest.com/category/banking
Meta Title: The Future of UK Banking Post-Pandemic: NetApp's Insights
Meta Description: Discover the latest findings from NetApp's financial services survey, revealing the challenges facing traditional banks and how customer perceptions are
URL: https://financedigest.com/traditional-banks-need-an-overhaulhtml

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_By_ **_Steve Rackham,_** _Senior Solutions Engineering Manager, EMEA Global Finance at NetApp_

The way we interact with banks since the dawn of internet banking has changed considerably. This is only set to continue in the wake of widespread digital transformation and technological advancements, such as open banking.

On top of this, the pandemic has forced the [financial services](https://www.financedigest.com/how-financial-services-are-overhauling-security-to-defend-against-spoofing-scams.html "How financial services are overhauling security to defend against spoofing scams") sector to adapt, quickly, to a digital-first business approach. Yet, despite the charge towards a digitalised financial market, [customers’ attitudes towards a full-on digital banking](https://www.financedigest.com/the-bank-of-me-why-banks-need-to-be-totally-customer-centric.html "The bank of me – why banks need to be totally customer centric") service remain varied. Data is the crux of the issue here and consequentially how consumers perceive the use of their data by [financial institutions](https://www.financedigest.com/what-the-future-holds-for-financial-institutions-in-2023.html "What the Future Holds For Financial Institutions in 2023").

These changes, combined with the continued, rapid rise of FinTech’s and their domination of a new-look [financial services landscape begs the question if traditional banks](https://www.financedigest.com/financial-crime-is-the-chink-in-the-banks-armour.html "Financial crime is the chink in the banks’ armour") will be able to keep up, and if an overhaul of existing models is required to do so.

In this article, I’ll discuss NetApp’s latest financial services survey, that revealed the challenges traditional [banks are facing and how customers perceive financial institutions – in turn affecting brand](https://www.financedigest.com/banks-need-to-become-a-lifestyle-brand.html "Banks need to become a lifestyle brand") trustworthiness, and potentially limit growth.

**The dilemma**

Customer perceptions, expectations and as a result, demands, have increased as the data landscape has evolved; and [crucially that traditional banks](https://www.financedigest.com/digital-experience-and-security-the-crucial-combination-for-banks.html "Digital experience and security – the crucial combination for banks") cannot afford to overlook this.

Providing the [ease of digital-first services](https://www.financedigest.com/decline-in-german-services-sector-eases-raising-hopes-for-milder-recession-pmi.html "Decline in German services sector eases, raising hopes for milder recession -PMI") to a generation that has adapted to doing most things online – from buying toilet roll to virtual counselling – is essential. This is supported by NetApp’s findings that 82% of respondents prefer to access information or [services from their banking](https://www.financedigest.com/20-billion-in-bank-service-fees-are-you-overpaying.html " Billion in Bank Service Fees: Are You Overpaying?") provider via their website, and the 94% that rate online banking as the most important banking service.

However, the research also indicates that in-person consultations are still valued by customers, with 52% preferring to go into a branch to access information or services, whereas just 27% like the idea of [automated and AI based banking](https://www.financedigest.com/how-banks-can-avoid-regulatory-reporting-mistakes-with-a-good-dose-of-automation.html "HOW BANKS CAN AVOID REGULATORY REPORTING MISTAKES WITH A GOOD DOSE OF AUTOMATION") services. When compared to all the other countries surveyed, UK customers also ranked the highest (of all countries surveyed) for rating in-person face-to-face service as the most important [banking](https://www.financedigest.com/30-per-cent-of-uk-consumers-would-use-amazon-google-facebook-or-apple-for-banking-services.html "30 Per Cent of UK Consumers Would Use Amazon, Google, Facebook or Apple for Banking Services") service available.

In the move to a more digital service to meet customer’s growing expectations and perceptions, the biggest challenge [banks face is not actually technology](https://www.financedigest.com/the-rise-of-biometric-technology-in-banking.html "The rise of biometric technology in banking") but trust. Consumers are trying to balance convenience with security, quite often this is about what they feel comfortable with. NetApp’s research reveals that while 80% of consumers believe that their [banks can be trusted to protect their money](https://www.financedigest.com/marketmind-banks-are-leaking-money.html "Marketmind: Banks are leaking money"), only 66% believe the same can be done with their personal data.

While 82% say they like the convenience that comes with paying through a third-party provider such as PayPal or Apple Pay, 64% of consumers were still concerned that their personal [data may be stolen](https://www.financedigest.com/frances-thales-says-hackers-claim-to-have-stolen-data.html "France’s Thales says hackers claim to have stolen data") by criminals if they use third-party providers. This is unsurprising since the [2020 Edelman Trust Barometer](https://www.edelman.com/trust/2020-trust-barometer) reported that the least trusted industry sector is financial services.

[Concerns with data security is a matter of trust and how information is being shared](https://www.financedigest.com/shares-slip-yields-rise-as-u-s-data-sparks-rate-hike-concerns.html "Shares slip, yields rise as U.S. data sparks rate hike concerns") with customers. The survey also supports this, with its findings that more than half (53%) of respondents [say that if they knew more about the safety of online banking](https://www.financedigest.com/boes-bailey-says-bank-reforms-worked-but-questions-about-liquidity-buffers.html "BoE’s Bailey says bank reforms worked but questions about liquidity buffers"), they would start to use it or use it more often.

**The competition**

On top of this challenge is the emergence of FinTech companies. With their cloud-based capabilities and digital-first model, they can adapt to change easily as new technologies arise and consumer expectations evolve.

However, it’s third-party providers like PayPal and Apple that traditional [banks need](https://www.financedigest.com/knowing-your-customers-needs-is-essential-for-banking-innovation.html "KNOWING YOUR CUSTOMERS’ NEEDS IS ESSENTIAL FOR BANKING INNOVATION") to pay more attention to. Because these companies have more access to data and customers and are able to reach them in new ways by delivering personalised [services which traditional banks](https://www.financedigest.com/britain-seeks-to-boost-banking-services-from-fintechs.html "Britain seeks to boost banking services from fintechs") cannot.

FinTech’s are disrupting the market now, but it’s the potential disruption from the tech giants of this world in the [future that presents fierce competition for banking](https://www.financedigest.com/communicating-with-the-customer-is-the-future-of-mobile-banking.html "Communicating with the customer is the future of mobile banking") services. And unfortunately, traditional [banks are still playing](https://www.financedigest.com/dont-play-second-fiddle-how-disruptor-banks-can-leverage-music-and-audio.html "Don’t Play Second Fiddle: How Disruptor Banks Can Leverage Music and Audio") catch-up with the newer players in the market.

In addition to this [challenge is the fact that many traditional banking](https://www.financedigest.com/open-data-represents-the-biggest-challenge-to-banks-in-a-generation.html "Open data represents the biggest challenge to banks in a generation") customers don’t have the app mentality, with consumers more likely to use a banking website than an app. Ultimately, why would customers move to [banking via an app if they’re already accustomed to engaging](https://www.financedigest.com/how-conversational-commerce-can-help-banks-engage-with-millennials.html "How conversational commerce can help banks engage with Millennials") with the website? Traditional [banks will have to give customers](https://www.financedigest.com/visionary-banks-fight-the-blur-hybrid-computing-architecture-brings-a-faster-sharper-customer-experience.html "Visionary banks fight “the blur”: Hybrid computing architecture brings a faster, sharper customer experience") a good reason to, if they’re to join the competition.

**The** [future of traditional banks](https://www.financedigest.com/the-rise-of-virtual-agents-the-future-banking-experience.html "The rise of virtual agents: the future banking experience")

This range of issues are challenging the [future of traditional banks](https://www.financedigest.com/bank-of-the-future.html "Bank of the future") and must be faced head on if they’re to compete with new players in the market, make an impact now, and lead the way in the future.

In general, consumers of today have come to expect highly personalised services from businesses – 90% of consumers are happy to share their behavioural data to get a better brand experience, while 72% will only engage with services that are tailored to their interests, according to [SmarterHQ](https://smarterhq.com/privacy-report).

So, while traditional [banks must deal](https://www.financedigest.com/seven-out-of-ten-uk-adults-aged-25-44-never-seek-advice-on-dealing-with-debts-despite-depending-on-the-bank-of-mum-and-dad.html "Seven out of ten UK adults aged 25-44 never seek advice on dealing with debts despite depending on the bank of mum and dad") with concerns of trust while providing the best service to their customers, they must also find ways to utilise a data-driven approach. If financial services are not moving at the speed of data, these organisations are at risk of being [left behind](https://www.financedigest.com/click-and-collect-or-get-left-behind.html "Click and Collect or get left behind").

This means integrating a data-centric approach into their products and using data to manage processes such as mitigating risk, managing fraud, automating payments, delivering mobile [online banking](https://www.financedigest.com/dutch-online-bank-bunq-applies-for-u-s-banking-licence.html "Dutch online bank Bunq applies for U.S. banking licence") services and processing mortgages. If [financial organisations](https://www.financedigest.com/cloud-migration-for-financial-services-organisations-whats-the-best-approach.html "Cloud Migration for Financial Services Organisations – What’s the best approach?") do this successfully, they will continue to meet customers anywhere, anytime, and on any device, now and in the future.


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