European consumers want better digital banking, finds Backbase survey
AMSTERDAM - 20 May, 2025 - Backbase, the global leader in 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.
Digital experience as a driver of customer satisfaction
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.
Traditional branch banks run the risk of losing dissatisfied customers as their patience wanes or barriers to switching decrease. There banks need to take customer dissatisfaction seriously. Those who don't modernize soon will lose valuable customers to the digital challengers who are already in the market
Matthijs Eijpe
Managing Director & SVP Sales EMEA at Backbase
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.
Matthijs Eijpe
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.
More important findings:
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.
Modernization as the key to securing the future of banks
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.