Digital banks are ‘good for the Irish banking sector’ – survey

Trust in digital banks rises as branch closures lead to distrust in traditional banks

Some 54 per cent of respondents say the arrival of challenger platforms has forced Irish banks to raise their game

Some 54 per cent of respondents say the arrival of challenger platforms has forced Irish banks to raise their game

 

Close to two-thirds of Irish consumers say they trust digital banks with over half believing their arrival has been good for the banking sector as a whole.

A new survey conducted by N26, which has approximately 200,000 users here, found that 54 per cent of respondents felt the arrival of challenger platforms has forced Irish banks to raise their game.

A group of Irish banks recently committed almost €5.9 million in inital capital to a joint venture called Synch Payments, which is intended to take on the likes of N26 and Revolut, which have grown increasingly popular in recent years.

According to the survey of over 1,000 people, 69 per cent said they trusted digital banking providers with 62 per cent of these saying it was due to the simplicity of their services.

Some 50 per cent of respondents said the new platforms brought a fresh new perspective on banking while 48 per cent said transparancy on fees was a key reason for trusting them.

A fifth of consumers said they would prefer to open a European bank rather than one with a legacy Irish bank because they did not trust the local institutions. The rise in fees and branch closures were cited as key reasons for the distrust as was bad virtual customer service.

“The last 12 months since the Covid-19 pandemic began has shown us that there is a transition taking place in how we do our banking, from in-person in our local branch to online via a bank’s website or mobile app,” said Adrienne Gormley, chief operating officer of N26.

“I believe Ireland is a prime example of such a transition with the high growth and adoption of digital banks such as N26 as well as the recent announcements by established banks in closing their physical branches and starting to move towards digital banking,” she added.