HONG KONG: Almost half of all consumers in China can be described as "heavy users" of online financial services, while around four in ten do not use any at all, new research has shown.

Just 11% were classified as "basic users" by consulting firm McKinsey, which surveyed more than 3,500 consumers across Tier 1, 2, 3, and 4 cities for its report Four Trends Shaping China's Retail Banking Landscape.

The 47% of heavy users used both online and mobile banking services from banks and/or financial services from internet companies such as Tencent or Taobao. Basic users (11%) used only online banking services and not those provided by internet companies, while the remainder (42%) used neither.

Security was the main concern of non-users but the survey found that 74% of respondents would consider opening an account with a pure digital bank, while 69% were open to the idea of a digital bank as their primary bank.

As it is, consumers are spreading their custom more widely than before and are now using an average of three banks compared to 2.5 in 2011.

And while the "Big Four" state-owned banks – the Agricultural Bank of China, the Industrial and Commercial Bank of China, the Bank of China and the China Construction Bank – remain the primary bank of most consumers, their dominance is starting to decline.

One of these four was the primary bank for 78% of Chinese consumers in 2011, but this had slipped to 73% in 2014, as rival joint stock banks offered better services and returns for savers. "Products are now driving loyalty rather than specific institutions," according to the report.

In fact, it said less than half of Chinese consumers will remain loyal to their primary bank when offered more attractive pricing terms from competitors.

A further development is the narrowing of the product penetration gap between city tiers as consumers in lower tier cities acquire savings accounts, credit cards, personal loans, investments and insurance products "at an extraordinary pace".

Retail banks need to move towards a "total relationship model", advised McKinsey, while internet players should better understand how to integrate financial services with the consumer's digital lifestyle.

Data sourced from McKinsey; additional content by Warc staff