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Quick Cash: Mobile Banking in the Digital Age
It is stating the obvious to say that the internet has changed the way we live our lives in many different ways, but it's worth taking a step back and appreciating that high-speed broadband access has only been commonplace since the turn of the Millennium, and the first iPhone wasn't released until 2007.
For the generation typically known as Millennials, who have grown up with this technology, it is a simple fact of life - and using the internet or a smartphone for banking feels natural, rather than disruptive.
As for the older generations, mobile technology is increasingly helping people to retain their independence much later into retirement - it's easier to bank online from home than to get to your local branch, if you have mobility problems.
The benefits are near-universal, especially for the beleaguered high street banks as they cut smaller branches in an effort to save on operating costs.
According to the BBA, British banking customers had 427 million in-branch transactions with their banks in 2015, compared with 895 million transactions via mobile apps, making mobile the number-one way to manage personal finances in the UK.
The BBA made online and mobile banking one of its five recommended New Year's Resolutions for individuals in 2016, telling consumers to sign up for email and text alerts to flag up when they go overdrawn.
Again this has advantages for the banks - literally a direct line to their customers, without the expense and impracticality of printing a letter and paying for postage costs, not to mention the environmental impact of the paper this uses.
So it is no surprise that the banks are incentivising online and mobile banking:
- Co-operative Bank customers can get £66 cashback into their Standard Current Account for logging on to online banking or the mobile app at least once a month;
- Halifax offers cashback when mobile and online banking customers use their debit card at certain retailers.
And these incentives seem to be working too - Halifax reports that in March-June 2015, the most recent period for which figures are available, it managed a net gain of more than 34,000 new customers, making it one of the most switched-to banks on the high street.
This kind of incentive is an indication of the more joined-up thinking used by Millennials, who are as likely to appreciate money-off at their favourite retailers as they are cashback over the counter at the bank.
Mobile banking has untethered accounts from the cashier's window, putting consumers more closely in touch with their finances wherever they are.
According to Experian, 45% of Millennials now count technology as important in managing their finances - almost as many as the 46% who do not consider it to be crucial in their everyday banking.
Fewer than one in ten (9%) now visit their branch as their first-choice way of banking; only 1% prefer telephone banking; 25% use a mobile banking app; and 56% bank via a website on their computer, tablet or smartphone browser.
Unusually, this is a trend with almost universal advantages, for consumers managing their cash better, banks saving on overheads and admin, and even for the retailers who have new incentive schemes to join.
Millennials are still only reaching their 30s, and are the first generation to have these capabilities throughout their adult lives so far - as they continue to mature and their own children start to spend in their own right, mobile banking can only become more and more prevalent still.
Categories: Financial Services