One of the repercussions of the economic volatility and financial adversity of recent years is a decline in loyalty to established banks, recent research suggests.
A survey by professional services firm PricewaterhouseCoopers (PwC) found that less than half (41 per cent) of consumers in the UK are loyal to their traditional bank.
More than a third (35 per cent) of the 2,054 people polled said challenger banks provide a good alternative to bigger institutions, while 26 per cent thought the emergence of these smaller providers offered a new approach to banking.
Furthermore, four out of ten (40 per cent) people would consider using a challenger bank for their current account and 38 per cent would possibly go to one of these firms for a savings account.
Steve Davies, UK retail banking leader at PwC, said smaller providers are putting customers at the centre of how they do business, but are also offering standard products and services, and facing the same regulatory constraints as their larger rivals.
He also stressed the importance of learning from other markets when it comes to focusing on the customer experience.
"Leaders of traditional banks understand this challenge and they are pushing their businesses to change," added Mr Davies.
"There is a race to become much more customer focused, and be seen to be doing so. This can only benefit UK retail banking customers, but there is a lot of work to be done."
This month also saw the release of the PwC report Retail Banking 2020: Evolution or Revolution, which revealed that 55 per cent of global bank executives see non-traditional competitors as a threat to traditional institutions.
However, 31 per cent of respondents thought this new dynamic offers opportunities for innovative partnerships.
The Forum of Private Business has also commented on the growth of challenger banks, noting that an increase in lending to these firms was one of the positives to emerge from the Bank of England's latest Funding for Lending data.
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