Financial incentives related to switching banking providers have been well-publicised across the UK. However, new research suggests that for many UK consumers, a positive customer experience ranks as a higher priority, leaving many happy to simply stay put. 

In fact, good customer service is the main reason that around 40 per cent of UK consumers stay with their current banking provider; European customer service software provider Odigo has revealed. The importance of feeling valued by their bank was also highlighted as it revealed that 47 per cent realise they miss out on better financial service deals by not switching.

The findings show that amid ongoing financial constraints, around 19.4 million UK adults consider good customer service at least as equally as important as financial savings.

This comes as financial expert and consumer champion Martin Lewis recently claimed that anyone with a bank account risks losing around £200 by not switching now. However, the Odigo research shows that 35 per cent of consumers believe they don’t lose money by staying with their current provider; while 40 per cent of consumers also cite strong reputation and trust as another key reason to stay with their banks.

At the other end of the spectrum, poor customer experience was named as one of the top reasons to swap providers by 35.7 per cent of consumers. Around 37.4 per cent named better interest rates as a reason to stay.

‘Good customer service is still king’

Vincent Lascoux, chief customer success officer at Odigo, offered his take on the findings: “The research has spoken – despite the financial challenges and difficulties faced by consumers, good customer service is still king when it comes to retention.

“Whilst banking providers should continue using financial benefits, such as cash incentives and better-saving rates, to encourage customers to switch, as part of their strategy, this must not come at the expense of a positive experience for their existing customers.”

As banks continue to focus on digitally innovating their offerings and processes, they cannot afford to let the quality of their customer service drop. Instead, they must look at investing in platforms such as chatbots, website updates, and social media reactivity to ensure they are meeting customer expectations.

Investing in customer service is especially important for incumbent banks that are facing increased competition from challengers, such as Monzo and Starling Bank who ranked at the top of the Competition and Markets Authority (CMA) and Which? customer satisfaction rankings.

Particularly since the release of OpenAI‘s ChatGPT at the back-end of 2022, the world has sat up and taken notice of the potential of artificial intelligence (AI) to disrupt all industries in countless ways. To kick off 2024, The Fintech Times is exploring how the world of AI may continue to impact the fintech industry and beyond throughout the coming year.

In 2021, non-fungible tokens (NFTs) took off in popularity seemingly overnight. However, after initial hype, NFTs’ popularity has since fallen off a cliff. In Q4 2021, there were nearly two million active NFT wallets, but by Q3 2023, this number had dropped to 227,000. With AI becoming mainstream in a similar, short amount of time, it begs the question – will the technology also fall out of favour or, unlike NFTs, is it here to stay?

Here to stay but it won’t hog the limelight

AI’s continuous development will mean the technology is here to stay according to Michelle Moody, MD at Protiviti UK, the management consulting firm, however, other emerging technologies may start to steal the headlines in the future. Listing examples, she said: “The AI hype will likely continue going forward and will continue to evolve alongside technologies, regulations, and capabilities in the market. However, some other emerging technologies may become more prevalent in the market.

“For example, quantum computing is beginning to appear in the market to create a super-fast technology for problem-solving using vast amounts of computations and data too complex for classical computers.

“Other areas that might come to the forefront in the next couple of years are advanced robotics and gene editing technologies. These include CRISPR gene editing, edge computing and synthetic biology, where new biological parts/systems can be developed and could be helpful in areas of renewable energy and pharmaceuticals.

Accessibility has been the catalyst for its popularity, and this will only increase

Limiting barriers to adoption is a vital part of a technology’s success. AI has been around for years, but it hasn’t always been accessible. Ylva Oertengren, COO at Simply Asset Finance, the asset finance provider, explains how making AI more inclusive has accelerated its growth.

“AI is here to stay. It has been around for a while already; the hype has come from it becoming more accessible. Now, it’s not just developers who can use AI models, anyone can. This inclusivity has been transformative for teams in all areas of business operations. With more people able to access and understand how AI can be used, the more likely it is to be embedded in our everyday business operations and become more commonplace.”

Only the beginning

Ben Parker, CEO of eflow Global, the trade surveillance tool, explains how accessible AI has now become, rather than emerging technologies replacing it: “eflow believes that AI is here to stay and still has plenty of room for further development; the pace of change just over the last 12 months shows how quickly it’s evolving. In many respects, we believe the pertinent question is more about how accessible AI has now become, rather than emerging technologies replacing it.

“Highly dynamic and collaborative tools such as GPT4 are now available to individuals with little or no technical understanding of developing trading strategies. This raises the potential risk that retail investors could start using AI tools and become the perpetrator of market abuse, either inadvertently or deliberately.”

The era of quantum is coming

Appreciating why firms are focusing on AI, Andy Cease, director of product marketing at paytech Entrust, looks at how important quantum technology will be in the fintech sphere.

“Post-quantum cryptography is not yet a top priority for most bank CISOs, despite the existential threat it poses. More immediate issues like AI, biometrics, customer adoption and fraud take precedence currently. However, long data retention mandates in banking mean ‘harvest now, decrypt later’ quantum attacks could expose records far in the future.

“Banks should already be upgrading cryptography to post-quantum standards, even if quantum computers aren’t yet a reality. For banks, threats like synthetic identity theft feel more tangible in the short term. Post-quantum seems abstract, like the early warnings about climate change decades ago. But quantum computing will manifest itself eventually, and the failure to prepare will be felt for the next 20-30 years.”

Terraform Labs co-founder Do Kwon, expected to be extradited to the United States to face criminal charges, will reportedly stay in Montenegrin custody until February.

According to a Dec. 12 Bloomberg report, authorities with the U.S. and South Korea requested Montenegrin officials hold Kwon for an additional two months following the conclusion of his prison sentence. The Terraform Labs co-founder was arrested in Montenegro in March for using falsified travel documents and sentenced to four months behind bars.

Kwon, a South Korean national formerly based in Singapore, has been charged in the U.S. and South Korea for his alleged role in the collapse of Terra. The Wall Street Journal reported on Dec. 7 that the U.S. would be taking custody of Kwon before South Korea. Both countries have extradition requests pending at the time of publication.

Related: Do Kwon could serve prison in both US and South Korea, prosecutor says

If extradited to the United States, Kwon would face eight criminal charges, including commodities fraud, securities fraud, wire fraud and conspiracy to defraud and engage in market manipulation related to his time at Terraform Labs. The U.S. Securities and Exchange Commission (SEC) has also charged Kwon with “defrauding investors in crypto schemes.”

Terra collapsed in May 2022, which many considered a significant event kicking off a crypto market downturn. TerraUSD (UST) depegged from the U.S. dollar, and many firms later filed for bankruptcy, including Voyager Digital, BlockFi, Celsius Network and FTX.

Magazine: Terra collapsed because it used hubris for collateral — Knifefight