GFT’s latest Banking Disruption Index highlights the frustration consumers feel with their bank when spending abroad
London, 25 April 2023 – New research has shown that many Brits think their bank’s fees for spending money abroad are unfair or unreasonable, and a high proportion don’t even understand the fees being charged. Specifically, the research found:
- Only 26% of consumers understand their banking providers' foreign spending fees
- 32% of consumers do not think their banks' fees for spending abroad are reasonable
- 38% do not even know what the fees are
- 25% of consumers want their bank to provide better transparency over transaction and exchange charges
- 39% of those who use new digital-only banks (neobanks) whilst abroad, do so because they offer the lowest fees
The research comes from digital transformation specialist GFT, as part of its latest Banking Disruption Index; a quarterly assessment of consumer attitudes towards their bank’s digital capabilities.
It found the confusion around banking fees has been a major driver in people opening accounts with neobanks. More than two in five (42%) of consumers surveyed currently have a neobank account and half of those that do, opened their account for the currency exchange benefits it offers whilst spending money abroad.
Card payments continue to be the most popular method of payment whilst overseas, with almost half (47%) of consumers using a bank card from a traditional or neobank to make transactions. This high usage highlights why transaction fees are so important, and why increasing numbers of people are choosing to use neobanks whilst travelling abroad.
Over a third (34%) of consumers also said that the ability to choose whether to pay in the local currency or in GBP is the main factor for using a neobank whilst abroad.
Given the focus consumers are placing on how they spend whilst abroad, GFT set out to discover the additional services customers want to see more of from their banks whilst overseas, including:
- 28% of those surveyed said they would like their banking apps to offer real-time currency exchange rates
- 29% of 25-34-year olds want the ability to pay in GBP or local currency from different ‘pots’
Richard Kalas, Client Solutions Director, Retail Banking at GFT UK, said:
“It's clear there is a significant difference between the offerings provided by neobanks and traditional banks when customers are spending their money abroad. More digitally savvy customers are already taking advantage of neobank capabilities and it is inevitable adoption will only increase in future.”
As part of the Banking Disruption Index, GFT also assesses consumer sentiment towards their bank overall. In Q1 2023, the sentiment score dropped two points since Q4 2022, down to 77 points, signifying a downward change in consumer attitudes towards their banking provider.
The full Banking Disruption Index report including further detailed analysis is available below.
The GFT Banking Disruption Index is released each quarter.
¹Censuswide research commissioned by GFT UK to survey 2,000 UK respondents in March 2023 on their opinions towards the digital capabilities of British Banks.
Banking Disruption Index - Report
The GFT Banking Disruption Index will be released each quarter. Download the latest report here.
“It's clear there is a significant difference between the offerings provided by neobanks and traditional banks when customers are spending their money abroad.”
The table below showcases the current transaction fees of the nine largest traditional banks in the UK and four of the most popular neobanks.
(Correct as at 24 April 2023)
These rates are liable to change over time - please follow the links provided to find the latest
charges applied by each bank and their terms and conditions.
|Bank||Overseas cash withdrawl fee||
Worldwide transaction fee
In Europe: Customer pays 3% on withdrawals over £250 every 30 days if not on Monzo PremiumRest of the world: You can take out £200 for freeevery 30 days, and Monzo will charge 3% after that.
Free withdrawals up to 5 ATM withdrawals or £200 per rolling month (whichever comes first), then a fee applies. That fee is 2% of the withdrawal, subject to a minimum fee of £1 per withdrawal.
Free within the European Payments Area
Don’t charge fees at ATMs — but warn customers that some ATM owners overseas do.
2.75% non-sterling transaction fee.
A cash fee of 2% (minimum £1.75, maximum £5) onwithdrawals using a debit card.
|Lloyds Banking Group||
Charge a foreign currency cash fee of £1.50 for each withdrawal, except for withdrawals of Euro inside the EEA.
|Royal Bank of Scotland||2.75% of the value of the withdrawal.||2.75%|
|Natwest||2.75% of the value of the withdrawal.||2.75%|
Will not charge the customer when using their personal debit card to make withdrawals at Santander cash machines abroad.
|Nationwide Building Society||
No Fee at LINK ATMs or over-the-counter, 2.99% of the transaction amount at non-LINK ATMs.
|The Co-operative Bank||
3% of the cash withdrawn (minimum £3), on top of the 2.75% transaction fee.
2.99% transaction fee followed by 1.5% of the value of the withdrawal. This fee will be a minimum of £2 and a maximum of £4.50.
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Brits unhappy with foreign banking charges; only 26% clear on fees
GFT’s latest Banking Disruption Index highlights the frustration consumers feel with their bank when spending abroad.