Digital banking has become part of European’s everyday life new study from Mastercard revealsJune 3, 2019 | Amsterdam | By Juliane Schmitz-Engels
Mastercard is the partner of choice for more than 60 digitized banks across Europe, more than twice as much as two years ago when the Digital Banking Study took place for the first time
- 84% pursue digital banking regularly, 63% use mobile banking apps from traditional banks, one in five from digital-only banks and almost two thirds expect the demand for digital banking solutions to even increase in the future
- More than half of Europeans say they will consider switching to a digital bank at some point
- Convenience remains the biggest advantage of digital banking solutions at a time when Europeans demand security more than ever as their most important criteria for using digital banking solutions (67%).
- While the large majority of people are not aware of the European open banking initiative (85%), almost half would welcome the services enabled by open banking (43%)
- Traditional and digital banks are by far the most trustful source for people when they search for information about managing their money
Never before has the importance of technology been greater in financial services. Digital banking solutions and apps have made their way into everyday life across Europe. A new study across 11 markets commissioned by Mastercard* reveals that six out of seven people use digital banking solutions at least once a month, 38 percent do so on a weekly or even daily basis. 63% use mobile banking apps from traditional banks and one in five (20%) already from digital-only banks.
As banking becomes increasingly digital and connected, people demand security more than ever before naming it their most important criteria for using digital banking solutions (67%). In a similar study two years ago, only 39% voted for safety and security when they were asked the same question.
On the other hand, Europeans consider convenience a little less important than two years ago (from 43% in 2017 to 33% in 2019). Nevertheless, they still think that this is the biggest advantage of digital banking solutions because they are time-saving (66%) and easy to use (65%). Nearly two thirds (63%) also think that the demand for mobile financial solutions will increase in the future because they make transactions simple and convenient. This will require the banking industry to implement multi-factor authentication, secure applications, and other forms of security such as biometrics.
Mastercard doubles partnerships with digitized banks in Europe as more than 90% of Europeans believe in cooperation in the financial sector
As the study shows, more than 9 in 10 Europeans believe that collaboration and partnerships are essential to spark innovation in the financial sector and more than 75% think that Mastercard is the right partner for digital players, valuing the company’s technology which is safe, secure and easy to use (28 %), its reliability as a partner (23%) and its innovative products (22%). Over the past two years, Mastercard more than doubled its partnerships with digitized banks across the continent. Today, more than 60 digital players rely on the technological know-how from Mastercard, the global infrastructure, a world-wide network to financial institutions and the ability to deliver digital solutions. Partners range from digital-only players like Monzo, Revolut or Holvi to digital banking solutions from established banks like ING or BNP Paribas.
Jason Lane, Executive Vice President, Market Development Europe at Mastercard, said: “The study underlines that digital banking through traditional and digital-only banks is the new normal for most Europeans. They want digital products that are easy to use and secure at the same time. We believe strongly in collaboration to bring out the best in digital innovation and are proud to be the leading partner of choice for a continuously growing number of digitized banks helping them to deliver safe and convenient digital payment solutions. Through our trusted partners we are able to provide consumers a network with the latest in digital payments security to give everyone peace of mind when using a digital payment solution.“
Customers demand more digital services from their incumbent banks
When it comes to the future of banks, a growing number of Europeans say they will consider switching to a digital bank at some point (from 49% in 2017 to 54% in 2019). People aged between 18 and 29 are the most disloyal age group (63% considering a change). In Hungary, 28% consider changing their bank for a digital-only bank during the next 12 months, followed by Italy (20%) and the UK (18%). The European average is 13%. At the same time – as traditional banks offer more and more digital banking products as well – an increasing number of people (39 % compared to 32 % in 2017) say that they will stay with their bank, with the Dutch and Swiss (58 % each) being the most loyal bank customers. Almost one in ten (7%) Europeans is a client of a digital-only bank, the top 3 markets being Germany (14%), Italy (11%) and Spain (10%).
As people move towards digital banking solutions they demand similar services from their incumbent banks. The three benefits that customers look for the most are that their services are available everywhere as well as easy to use (32%), real-time cost control and transparency (25%) and more flexibility (22%).
Europeans embrace innovations enabled by the EU’s Open Banking Initiative
In September 2019, the PSD2 Open Banking initiative will come into effect in the EU. This means that apps and other third parties will be able to access information from people’s bank accounts, as well as trigger payments from them, provided that they will have been given explicit permission by the customer. As the study shows, most people (85%) are not aware of this initiative or have little knowledge about it. Nevertheless, new digital services enabled by open banking are asked for by many Europeans: Whereas 13% already use mobile apps which track finances from multiple bank accounts, almost half of them (43%) would love to use an app to see, in one place, current/savings accounts from all the different banks. More than a fifth (22%) would favor a service that can help them manage their money and forecast spending patterns based on analysis of all their previous spending records.
Banks are by far the most trusted source for information about managing money
With trust and security being major pillars of the open banking ecosystem, banks have the advantage of being - by far - the most trusted source when it comes to information about managing money. 70% of Europeans see banks as their preferred go-to source, with Bulgarians (80%), Swiss (78%) and Russians (77%) being the most trustful in the information provided by them and the British (59%) having the least confidence in them. A third of Europeans (33%) asks friends or family members and it is especially the younger generation from 18-29 years who seek trusted financial information from their friends (44%). 21% get their information from the media, 15 % from financial advice companies and 1 out of 10 (11%) from apps and social media.
When it comes to trusting their friends, most Europeans (72%) however would not go as far as sharing their bank details with them. Only 1 in 10 (13%) said that they would do it with people in the UK trusting their friends the most (30%). The younger generation appears to be more open and trusting of their friends as 18% of those aged between 18 and 29 but only 8% of those aged between 50 and 69 would share their financial details with them.
Jason Lane added: “We see that Europeans are very much interested in connected and personalized financial services which make their banking easier and more transparent. The Open Banking initiative will help drive these innovations. As trust is a key success factor, banks are in the pole position for providing such solutions to their customers as people trust them more than any other peer groups or institutions when it comes to managing their money. With its suite of services, Mastercard fully supports the transformation taking place in the industry as our partners ready themselves to take full advantage of the opportunities offered by Europe’s PSD2 legislation. Our new services will make it easier for banks and third party providers to work together, enabling open banking to excel."
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*About the European Digital Banking Study
Following a similar study from 2017, this new study was conducted by TNS Kantar and commissioned by Mastercard. 11,014 samples were taken from eleven markets.
About Mastercard Mastercard (NYSE: MA), www.mastercard.com, is a technology company in the global payments industry. We operate the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. Mastercard products and solutions make everyday commerce activities – such as shopping, traveling, running a business and managing finances – easier, more secure and more efficient for everyone. Follow us on Twitter @MastercardNews, join the discussion on the Beyond the Transaction Blog and subscribe for the latest news on the Engagement Bureau.
Mastercard at Money 20/20 Europe
Mastercard will have a stand, located in the main hall at B50 at Money 20/20 Europe from 3rd – 5th June with a number of key execs available for media interviews – for more information please visit the Mastercard Newsroom for images, press releases and information or look at @MastercardEU throughout 3rd – 5th June 2019.
Mastercard Communications Contact Name, Juliane.Schmitz-Engels@mastercard.com