Mobile is the new banking branch

Not so long ago, banking meant visiting your nearest branch at inconvenient hours and waiting in line to carry out a transaction. Even with the advent of Internet banking, the majority of transactions still took place outside banking hours, before work or at home.

Today, smartphones and personal banking apps have revolutionised the way people bank and also the services and tools they have come to expect. For many people, why visit a branch when you can do it all on a mobile?

Britain embraces mobile banking

To illustrate the impact of mobile banking in the UK, it now accounts for almost £1 billion worth of transactions each day totalling an incredible £6.4 billion a week – up from £5.8 billion last year. And the UK’s National Office of Statistics reported in August that 53% of the UK population has used Internet banking in 2014. Many of these customers are also actively using contactless payments, SMS balance alerts and mobile payment services. But despite the high rate of adoption, 50% of smartphone users in the UK would like to do even more mobile banking in the future [Source: FICO, January 2014].

According to this year’s “Way We Bank Now” report by the British Banking Association (BBA) in July, fifteen thousand people download banking apps every day. Banking and payment apps are consistently in the most downloaded charts, and in the UK to date 15 million people have already downloaded banking apps – a figure that has doubled for the last 2 years.

Anthony Browne, Chief Executive of the BBA, recently said “The British public is embracing mobile banking, contactless cards and a range of other consumer-friendly banking technologies. The way we bank now has made it a lot easier for us to keep track of our finances, with far more options about how we spend our money and talk to our bank”.

Just why have Britons taken to mobile banking so readily? The main reason is undoubtedly the convenience – it’s quick, saves time, it can be done anywhere and there are no queues. It’s no coincidence those were the top answers in a 2013 poll by Statista, which found that 66% of respondents stated “it’s quick” and 60% said “it saves me time”.

A clicks and mortar model

Those sentiments are just as relevant now as they were last year, but not everyone is convinced that brick-and-mortar stores will meet their demise so quickly. Robert Watts, Customer Relations Director at the BBA, said in November that “Technology is not for everyone. We all know people who are reluctant to email, let alone join Facebook or take to Twitter. Banks want to serve their customers and understand that not everyone wants to harness apps or other digital services”.

But Watts concedes “Millions of customers are now only using a branch once or twice a year, for those bigger moments, such as applying for a mortgage, assessing their financial options or resolving a complaint. Those are important times and banks want to be able to offer that face-to-face interactions at this time”.

He says that many banks will move towards a “Clicks and Mortar” model with a combination of phone, Internet and branch banking, and where the balance between each of these channels will vary from customer to customer.

Changing expectations

Simon McNamara, CEO of RBS Group, believes customer expectations are definitely changing. “It’s not that long ago that, to be perfectly honest, the only services we provided were at a cash counter within a branch,” he says while holding an iPhone 6.

“Now, between the hours of 7.30 and 9 o’clock in the morning, this device is the most active service that we provide. We used to be closed at that time, our branches weren’t available and, even with internet banking, most people had done that before they left for work. Now, we’re seeing our most active period. We’ve got four million logons on a daily basis, 750,000 payments on a device that didn’t exist three or four years ago”.

In a bid to make their services more accessible for customers who do venture into a branch, some banks are embracing mobile technology by providing staff with tablets. This frees up personnel from their workstations allowing them to perform all the services they normally would from anywhere in the bank.

However despite these welcome improvements in branches, the smartphone is now the preferred method of banking for many. And in future, the trend towards mobile banking looks set to increase further as smart watches and wearables become more popular. Even today, anyone with the Nationwide app on their Android phone can receive real-time account information using an Android Wear smart watch.

Tony Prestedge, COO at Nationwide, said: “Providing customers with a variety of ways to manage their money, whenever and how ever they want is a priority for us”, adding that “giving those members who want and have the technology the ability to check their balance on their watch provides them with even more choice as to how they interact with us”.

The era when you had to carry out your banking between 9.30am and 3.30pm on weekdays are thankfully long gone – the mobile truly is the new banking branch.