By Cindy Griffin, Financial Services Marketing Specialist, Smart Communications
Over 200,000 Brits have already switched banks in 2025. Why? The quick assumption is that it’s interest rates, better deals, or the growth of digital challengers like Monzo and Revolut.
But new data reveals a different answer. Customers aren’t being ‘poached’, they’re being pushed away by broken experiences.
Recent research that surveyed 3,000 consumers across the UK shows that loyalty is eroding not because of what challenger banks offer, but because legacy institutions fail to deliver. And the gap is rapidly widening.
Onboarding and data intake are driving people away
Opening a bank account is, in theory, a straightforward experience. But it has turned into a friction point that costs institutions customers before the relationship even begins. And once the account is open, manual, paper-based processes or ones requiring a phone call further deteriorate the relationship.
65% of respondents say they will abandon an interaction if the data collection or forms process is too difficult. This jumps to 73% for Millennials and 71% for Gen Z. In other words, this is a deal-breaker. And it’s happening at scale.
The problem is the quality of those channels, with too many banks digitising paper forms rather than redesigning them for how people behave online. Take static PDFs, for example: redundant questions, no option to save progress and endless document requests drag the process down. This friction could be eliminated with prefilling, instant validation, and the ability to upload documents in real-time.
PDFs and print are falling out of favour
For many customers today, the typical banking experience feels outdated compared to other everyday digital services. Download a PDF, print it, fill it out, then scan it back in the hope it’s all worked. It’s a small moment of friction, but repeated often, it can quietly erode trust.
The data supports this, with nearly two-thirds of consumers preferring guided digital forms to fillable PDFs. That doesn’t mean downloadable statements are disappearing overnight, but it does signal a clear shift in how people expect to interact with their bank. Tools that banks have relied on for decades, from posted statements to static PDFs, increasingly feel out of step with how customers want to interact now.
They want interactions that adapt to their responses, surface only relevant questions and provide real-time validation so they’re not left guessing if they’ve done something wrong.
Younger customers, especially Gen Z and Millennials, have even less patience for slow processes. 83% of Millennials and 80% of Gen Z say they are likely to use digital self-service rather than call a contact centre. But if that digital experience is clunky, they’ll bail out. In fact, 78% of Millennials and 72% of Gen Z say they’ll jump ship from their current providers if communications don’t meet expectations.
Boomers and Gen X customers are increasingly digital-first too. They judge banks not against other banks, but against the same ease-of-use standards set by the likes of Amazon, Netflix and Monzo.
Transparency and status updates are no longer optional
One of the most overlooked pain points in banking is post-submission silence; 43% of customers say they submit a form and wish they knew the status. What they get instead: radio silence, or a generic request for more information days later.
People want visibility, and they want it at every step. They want to know whether their application was received, what happens next, and when to expect a resolution. Real-time status updates and proactive communication are now fundamental expectations. High street banks that fail to meet them are handing challenger banks an advantage.
How can incumbents close the gap?
The good news is that these are solvable problems. Legacy banks have the trust, capital and established customer bases that challengers are still fighting to build. What they need is a hard reset on customer experience, particularly around onboarding, data collection and communication.
That means:
- redesigning data collection as a guided, mobile-friendly conversation that adapts in real time and eliminates unnecessary questions
- rethinking—and not just digitising—any process that still relies on downloadable PDFs or posted forms
- providing visibility at every step, with automated status updates and real-time progress tracking
- ensuring cross-channel consistency so customers get the same experience whether they’re on mobile, web or email
The fix: redesign, not rebuild
None of this requires a complete technology overhaul. It requires a shift in how customer interactions are designed. The banks that move quickly will not only stop the tide of switching, but they’ll also reclaim the experience advantage that digital challengers have exploited.
The switching surge is a vivid signal that customer expectations have evolved. High street banks can modernise, or risk the next wave carrying away another 200,000 customers.