According to research carried out at the end of last year, one-third of account holders are more likely to complete a mobile transaction than visit their nearest branch in order to conduct the same business. The nation, it seems, is shunning the high street in favor of online and mobile services, but what does this mean for brick and mortar banking, and where will these Internet-based applications head next?
The growth of Internet banking: why is it so popular?
The statistics are undeniable; banking is becoming less personal, with more and more customers than ever turning towards Internet banking and apps in order to keep their finances in check. Whether it’s taking a moment to check a balance, paying a bill, extending or reducing an overdraft limit, or applying for credit, there’s very little that can’t be done online these days. Customers are overwhelmingly choosing the accessibility, convenience, and efficiency of apps, mobile banking, and Internet-based financial services over visiting their high street branch during its opening hours, and who can blame them when those are so limited, and life is so hectic?
That said, the ease and convenience of mobile and online banking are not the sole contributing factors in the decline of the high street. The banks themselves could be said to be at fault for the increasing numbers of customers turning their backs on traditional services, simply by recognizing the popularity of the new technology and attempting to keep up.
It would appear to be true that the more money a bank plunges into its mobile and online platforms, the less there is to spare for their brick and mortar branches and customer service training, thus driving away the customers that had otherwise been happy to retain their physical relationship with their bank. Now they’ve been given a choice between an easily accessible service or reduced opening hours, banking customers are voting with their feet – and in their droves. In addition, mobile and online banking are quickly becoming the chosen means of financial handling for a whole new generation, as teenagers become the adults that have grown up with this kind of technology playing a prominent role in their lives. This prompts the question – could high street banks become obsolete altogether?
Future developments in the world of online banking
There is already a new trend emerging in the world of mobile and online banking; that of the bank that is based solely online. Atom, a UK-based online bank, has adopted a quirky and fun approach to its financial services, even operating on a platform designed by a games designer, and featuring the option for account holders to rename and rebrand their experience. At its heart, though, is a serious message; that banking need not stay in the past, nor be dragged kicking and screaming into the future – it’s ready for the here and now. Such a method of banking is an entirely new way of interacting with money, encouraging younger people to take an interest in their finances for what may be the first time. Indeed, online and mobile banking can only be a good thing if it is inspiring a new generation of account holders to adopt such financially responsible attitudes.
So, where does this leave banking as we may have known it? Already, traditional banks are increasing their online services, while newer and smaller services are springing into life with the sole purpose of existing online. Similarly, other financial services, such as those offering loans, credit cards and prepaid debit cards are choosing to operate online and via apps, rather than establishing themselves on the high street first. Opt+, for example, which is operated by the Speedy Group, provides a completely remote service via the web and an app in order to provide prepaid debit cards as a safer and more convenient way for account holders to manage their money – truly a new way of banking for a newer generation. Similarly, Speedy Cash, also regulated by the Speedy Group, offers a short-term loan service that’s completely web-based. Don Gayhardt, the CEO of Speedy, obviously understands this new and emerging market and its attraction for younger bankers in a way that many traditional services cannot. Young people are becoming shrewd with their savings, and they need banks that reflect the choices they are making.
Only time will tell what the future holds for the high street bank as it exists today. It’s certainly true that more and more consumers are turning their attention to online and mobile banking, but whether they can be tempted back is another thing. Banks would perhaps do well to recognize their dwindling physical customer base and the effect that will no doubt have on bricks and mortar branches before they plunge their efforts into mobile and online resources.
