Backbase, the global enabler of digital banking platforms, presents its new State of European Banking 2025: consumer survey report.
The study provides key insight into the shift in banking preferences, customer satisfaction and the growing “importance of digital services in financial decisions for European banking consumers, and highlights the need for banks to meet the evolving expectations of their customers.”
Traditional banks’ primary banking relationship is “under pressure, as one in five consumers is a customer of digital challengers.”
Almost 20% of respondents now use a direct bank or a neobank as their main financial service provider, illustrating “the increased market presence that digital challengers have established in Europe.”
Regions such as the Iberian Peninsula and the DACH region, where traditional banking innovation “has lagged behind other regions, show particularly high digital challenger acceptance, according to the report.”
The survey highlights the crucial “role of digital experience and digital services for customer satisfaction.”
Although traditional banks “dominate in terms of customer numbers and breadth of financial products, their digital experience often falls short of customer expectations.”
In an era where digital is the primary channel for much of society, this lack of customer satisfaction providing competitors the opportunity to gain market share:
- 48% of respondents from traditional banks stated they would be more satisfied if their bank offered more digital services, compared with only 38% of neobank customers
- For many customers, dissatisfaction with digital services is a strong reason for switching banks, with 26% of respondents having already changed their bank due to inadequate digital offerings and more considering it.
Although many traditional banks already have digital channels, results of the survey suggest that customers experiences which these are no longer up to par with market expectations:
- 59% of respondents want tailored financial recommendations
- 57% expect banking apps to automatically recognize international travel
- 52% want quick support via integrated in-app chat functions
- 47% want to be able to apply for products such as loans or credit cards digitally
Customers don’t just want digital banking – they expect “an intuitive user experience, and personalization comparable to their favorite e-commerce or entertainment apps.”
Investing has also become a point of importance for European consumers and one where digital challengers “such as neobanks, neobrokers, and fintechs have a significant advantage over traditional banks.”
Overall, 62% of respondents have “either invested in the past, plan to invest in the future, or are currently investing.”
Customers of direct banks and neobanks invest “continuously twice as often (10 %) as customers of traditional banks (7 %), and are more likely to reinvest.
Interest in investing is growing on the Iberian Peninsula (20%) and in the Nordics (21%), higher than the European average of 16%.”
From socio-economic perspective, younger respondents (under 40) are more willing to “invest and wealthier consumers place more important in the ease of use of investing products.”
If traditional banks want to remain “competitive and remain the primary banking relationship of European consumers, they must modernize their offerings and adapt their services more closely to individual customer needs.”
The State of European Banking 2025 report is sending a clear message, European banking preferences are “changing and traditional banks need to evolve to retain their customers.”
To do so, traditional banks need to modernize their digital banking experiences to be able to “overcome the legacy technology that prevents them from meeting the evolving demands of customers.”
Complacency is no longer an option, as the data from the report “shows that when Europeans consumers don’t get digital banking experiences they want, that will move the many digital-adept competitors available to them.”
Modernization is key for traditional banks to “remain competitive and finding the right technology partner that can offer the capabilities to empower modernization is crucial.”
Backbase is on a mission to put bankers “back in the driver’s seat — fully equipped to lead the AI revolution and unlock remarkable growth and efficiency.”
At the core of this mission is the world’s AI-powered Banking Platform, unifying “all servicing and sales journeys into an integrated suite.”
With Backbase, banks modernize their operations “across every line of business — from Retail and SME to Commercial, Private Banking, and Wealth Management.”
Backbase enables the digital and AI transformations of over “150 financial institutions worldwide.”
Founded in 2003 in Amsterdam, Backbase is a global private fintech company with regional headquarters “in Atlanta and Singapore, and offices across London, Sydney, Toronto, Dubai, Kraków, Cardiff, Hyderabad, and Mexico City.”
