UK Banks Fall Behind In FinTech

The British Government might claim the UK is a world leader in technology, but UK banking customers are missing out on seamless online transactions enjoyed in other countries by a failure of banks, and even fintech, to fully embrace facial recognition, automated data capture and social media data analysis.

According to an international study commissioned by identity data intelligence specialist GBG and conducted by Forrester, this is just one symptom of the UK financial sector lagging behind China, Singapore, the US and Australia in its approach to customer identity.

The findings show that 84% of UK finance firms are concerned about their ability to identify customers but UK firms are less inclined to invest in new technology to address this, and are more focused on cost-control than their global counterparts.

Major regulatory changes this year including Open Banking and GDPR, as well as ongoing Brexit negotiations, are having a major impact on the sector. At the same time customer expectations continue to rise as a result of digital empowerment and their experiences from the likes of Amazon, Apple, and Facebook.

In order to improve customer retention, loyalty, advocacy and customer satisfaction, UK financial service firms need to address the gap between their approach to new technology and that of their global competition, the report claims, adding that firms should build relationships through services that exceed customers’ current expectations and anticipate their future needs, improving financial well-being.

Facial recognition and automated electronic document capture have been used in airports for some time, and the iPhone X has taken facial recognition to an even more mainstream level.

Mick Hegarty, managing director of identity data intelligence specialist GBG, said: “It seems particularly clunky and outdated to have to visit a branch and produce a hard copy of an identity document and/or a utility bill to open up a new account. The likes of Amazon, Apple and Facebook have really raised the bar and everybody else needs to keep up.”

However, Hegarty insists there are promising signs for the future. He added: “Our research shows that UK fintechs are more interested than the established banks in adopting new approaches and more are planning to increase investment in the next 12 months. These new challenger banks will prove vital to the UK financial service sector in keeping pace with the rest of the world while we navigate a challenging year of legislation and policy change.”