Irish consumers losing trust in banks due to lack of in-person services, study finds

Irish consumers are losing trust in their banks due to the replacement of in-person branch interactions with digital services, according to a new study. File picture: Larry Cummins

Irish consumers are losing trust in their banks due to the replacement of in-person branch interactions with digital services, according to a new study.  

Without a strong emotional connection with their bank, customers are more likely to view banking services as a commodity.

Nearly half of Irish consumers (45%) ranked value for money as a top three factor when choosing a bank, making it the most important factor for Irish people. Globally, just 37% of consumers said value for money was a priority.  

The erosion of trust was accelerated by the Covid-19 pandemic, which further reduced the banks' in-person branch services.  

"While banks often view broader digital adoption as a way to lower costs and provide services 24/7, the rapid pivot to existing and rapidly launched digital services has all but removed the vital human element from banking, risking an erosion of consumer trust," the study read. 

"For instance, just over one in five (22%) of Irish consumers surveyed trust banks 'a lot' to look after their long-term financial well-being, compared with 29% of consumers globally."    

When asked how much they trust their bank to look after their data, just one in three Irish people surveyed said “a lot”. 

While overall trust is eroding, the study found that more than 52% of consumers believe that when providing advice, their bank has their best interest in mind “always” or “most of the time,” and 60% believe the advice is smart, personalised and well-informed.  

One in five Irish consumers said banks were in the best position to provide them with products and services outside of their core areas of expertise.

Meanwhile, Irish consumers were wary of new virtual banking. Only 17% of Irish respondents said tech providers were in the best position to provide products outside of their core areas of expertise. 

Just 14% of respondents agreed that social media companies and neobanks (banks that are online only with no physical branches) were the best providers for services outside their expertise.

Irish consumers were also more likely to trust financial advice from an adviser in person, compared to over the phone or a video call.

Fifty four per cent said they would trust a human adviser “a lot” if they were advising them in person in a branch while 45% of people said they would trust an adviser "a lot" if they were speaking over the phone.

Meanwhile, just 34% of Irish consumers said they would trust a human adviser “a lot” if they were delivering advice over a video call. 

Irish people were switching their bank accounts more often than the global average – 7.8% of Irish consumers said they switched their primary bank account in the past 12 months, compared with just 3.8% of consumers globally. 

The study suggests Irish consumers are switching more now because of the growth of neobanks in the local market. 

"Measuring switching has become more complex as consumers supplement their primary bank account with additional accounts that serve specific purposes – resulting in multi-banked customers," the study says.  

The findings were made in Accenture’s 2020 Global Banking Consumer Study, based on a survey of more than 47,000 consumers from 27 countries, including over 1,000 Irish people.