Online bank brands are failing to gain the trust of online customers, with four out of five people placing more trust in high street bank brands, according to a survey by ICM for brand consultants Henrion Ludlow Schmidt.
Consumer trust in established, high street bank brands has risen from 73% to 82% since the survey was last conducted in 2000, while trust in more recently branded offerings has remained absolutely static at 7%, despite high profile launches and publicity.
According to Datamonitor, online banking is growing rapidly. There were around 2 million users of e-banking channels in the UK during 2000, rising to 3.9 million by 2002.
The survey asked 1,000 UK consumers which bank brands they trust most: online brands (such as Egg or Smile), or traditional high street bank brands (such as Barclays, NatWest, Lloyds TSB or HSBC).
In the 18-24 age group, where allegiance to online brands would be most expected, trust has actually declined from 15% to 6% since 2000. Interestingly, 10% of the 35-44 age group trust online bank brands the most.
Only 1% of Scots trust online bank brands more than high street ones, with 91% putting their faith in traditional banks.
Some 5% of respondents said they don't trust either type of bank brand (which represents a big improvement, down from 14% in 2000).
"Consumers clearly appreciate traditional values in uncertain times," commented Chris Ludlow, co-founder of Henrion Ludlow Schmidt. "While internet banking use has grown dramatically, this research shows that new names and styles can't hope to make up for the security and trust built up by long-established brands."
According to Ludlow, the high street banks have been able to extend their brands to embrace new technologies. But online banks have no easy extension into the high street, putting them at a trust disadvantage.
The survey highlights the need for banks to identify the real values that are relevant to their customers before devising delivery channels, and not the other way around. In other words, a new delivery channel is not always an opportunity for a whole new brand.