Fintech and traditional banks: competition or… symbiosis?

For context, 42,6 million people in the UK accessed the Financial Services category in July 2021. (This category includes sites and apps that provide services including: Banking, Payments, Financial Services & advice, Investments, Insurance and Taxes.) Overall, 83.7% of the UK’s digital population spent in average 90 minutes per visitor in the category in July 2021, with half of them spent on banking sites. In total 67.7% of the UK population accessed a banking site in July 2021.

To compare digital strategies, we define two custom segments: ‘Traditional’ and ‘Digital-First’.

• Traditional: consists of the 5 brick-and-mortar retail banks with the largest number of unique visitors in July 2021 in the UK. In alphabetical order, these are Barclays, HSBC, Lloyds Bank, Natwest and Santander.

• Digital-First: consists of the top 5 fintech companies operating in the banking space and that offer current accounts and/or credit and debit cards. In alphabetical order, these are: Curve, Monese, Monzo, Revolut and Starling Bank.

The charts below allow us to compare the reach of both segments in the last 4 years.

When comparing the younger demographics (i.e. the 18-34 year-olds) with the overall digital population a nuanced picture emerges. Reach of the Digital-First segment grew year after year among the 18-34 year olds, and by a magnitude greater than that for the total digital population. And while reach of the traditional segment lost some ground across the total digital population, it decreased a lot more among the 18-34 year olds.

It can also be argued that although Digital-First banks have made the headlines – thanks to fast user uptake and even faster-growing valuations – there is still ample room for growth. Collectively, they reach roughly 10% of the total UK digital population, compared to a reach of 42.7% of the Traditional Banks.

Moreover, our data shows that Digital-First banks complement, rather than replace, traditional banks. To take an example from the chart below, 28.9 percent of users of Curve.com also visit Barclays.com; 29.8 percent visit Lloydsbank.com; 20.8 percent visit Santander.co.uk, 28.2 percent visit Natwest.com, and 30 percent visit HSBC.co.uk. (A similar pattern affects the other fintech companies.) In sum, users of fintech services still depend very much on traditional banks.

Flipping the data around brings the point home: as the chart below shows, only a small proportion of customers of any of the traditional banks also visit one of the fintech websites. For example, 9.4 percent of visitors to Natwest.com also visit Monzo. For other fintech services, this proportion tends to be noticeably smaller.

Clearly the great unbundling of the banking industry won’t happen overnight; if anything, traditional banks can roll out cross-selling and upselling strategies thanks to a rich portfolio of products and, to date, the largest audience in the banking sector. We see this reflected in the display ads of those banks: around 4 million desktop unique visitors were exposed to 17 million impressions from a bank (either traditional or digital-first) in July 2021. That is, 16% of the total desktop population in the UK were exposed to the ad with a frequency of 4.1 during the same period. HSBC, Barclays, and Santander the ad creatives with most impressions focused their messages on credit to consumers (i.e. personal loans and mortgages)[1]. On the other hand, for Natwest and Lloyds the ad creatives with most impressions focused on promoting the quality of their services[2].

For years the Banking and Finance sector has been dominated by well-known brands. The data has shown two adjacent stories shaking up the sector: yes, more and more consumers are adopting digital-first banks; yet at the same time traditional banks can still reach massive audiences with offerings that dovetail their most profitable services. It will be interesting to keep investigating how players in the banking space adapt their products, strategies and services to newer technologies, customer demands, and growing competition, thanks to fintech services who offer clients agility and simplicity.

For more details about our custom research and how at Comscore we can help financial services companies capitalise on the opportunities emerging within digital landscape, contact us.

[1] Source: Ad Metrix Creative Viewer, Total Internet, July 2021, UK
[2] Ibid.