- UK banks’ tech budgets will jump 19% to hit £11.60 billion this year.
- In this post, we explore five of the rarest mobile features that high street banks are investing in to stand out and win customers in a competitive market.
- This post is a teaser for the UK Mobile Banking Emerging Features Benchmark, due out later this month.
For banks in the UK, standing out with cutting-edge mobile features is costly, competitive, and can seem nearly futile.
And yet, that’s exactly what they need to do.
After a pandemic-related slump, banking tech spending in the UK, including internal and customer-facing, is roaring back to life, climbing to £13.01 ($17.66) billion in 2022, according to Insider Intelligence forecasts—representing 18.7% growth year-over-year.
The UK is a contentious digital battleground for many reasons: record branch closures, digital-only challenger banks drawing in customers by the millions, and customers young and old adopting digital as their first choice or, in some cases, only option amid the pandemic.
For banks, the digital competition could leave some eyeing the sidelines. That’s a mistake. Nearly half of all accounts opened in the UK in 2021 were with a challenger, such as Monzo, Revolut, or Starling, per our forecasts. And by 2025, nearly 4 in 10 adults will have an account with a digital-only bank.
To stay relevant, banks need to carve off a slice of the 3.7 million UK customers who will open accounts digitally with incumbents this year. A great way to do that is by investing in rare mobile features that distinguish one app from another to woo mobile-minded customers, like the 90% of Gen Zers who were already using digital banking pre-pandemic, per the UK Office of National Statistics.
I’ve spent my career benchmarking digital features, and I’ve come to learn that innovative features that customers love fit at least one of three boxes: rarity, utility, and novelty. Through our benchmarking studies, Insider Intelligence consults with digital leaders to identify around 50 of the most important emerging features that UK banks could offer every year.
Our team surveys consumers on the value they place on each and every feature, rewarding banks with points proportional to the level of consumer demand if they offer the features. Digital and product leaders use this data to see how their app stacks up, to inform and justify investments in unproven features, and to spotlight demand by key customer segments.
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This year, we’ve teamed up with Scientia to offer even more data. Scientia operates the research platform FinTech Insights, which analyzes over 100 incumbent and entrant providers in the UK and the US, identifying what features they offer, providing videos of those features at work, and scoring the friction of capabilities. The screenshots below are from its research platform.
Here are five of the rarest features offered by top UK banks and building societies.
1. NatWest’s rarest feature: The ability to turn off contactless transactions from the app.
Why it’s valuable: Contactless now accounts for a quarter of payments in the UK, presenting a generous attack vector to criminals. Customers can easily eliminate that threat with this feature, which NatWest is alone in offering among the top 10 banks.
2. Virgin Money’s rarest feature: Set alerts for international debit card transactions.
Why it’s valuable: As travel restrictions look poised to rise in the UK, this Virgin-exclusive feature helps customers ensure that money spent overseas finances their own vacations—not a fraudster’s. In particular, younger consumers put a premium on the feature.
3. Barclays’ rarest feature: Stop payments on a cheque.
Why it’s valuable: An in-app stop-payment capability aids mobile banking customers in stressful scenarios, such as when a check is undelivered. The feature was deemed “extremely valuable” by 23.5% of respondents, and only Barclays supports it.
4. Lloyds’ rarest feature: Use search to find features and information.
Why it’s valuable: On its face, app-wide search might not seem sexy (sorry, Google). But this feature is a game changer because it surfaces useful features or information tucked away in dusty corners of the app. Lloyds is alone among the top 10 banks with app-wide search.
5. HSBC’s rare feature: See a prediction of the money your spending and/or upcoming bills will leave you with.
Why it’s valuable: This feature can help the 12 million UK adults who have low financial resilience, meaning they may struggle with bills or loan repayments, per the FCA. HSBC is one of only two top UK banks offering this feature.