Seven million Brits are planning to switch retail banks in 2015 to access better mobile payments services.
These figures, combined with a system introduced in 2013 to make it easier to switch bank accounts, are a warning to banks that are not investing in digital technology.
Research from Vocalink’s mobile banking subsidiary, Zapp, revealed a massive 21 million British people would change banks to access mobile payments, with 33% of these planning it over the next year.
The research carried out by Atomik Research showed 44% of consumers plan to switch accounts if their current bank has no plans to offer mobile payments.
Mobile payments are increasing in volumes and values and 47% of consumers said they will actively choose to shop online or in-store with a retailer because it accepts mobile payments, according to the Zapp research.
One in five people even said they would buy a house using a mobile payment within five years.
More on mobile payments
Zapp CEO Peter Keenan said the success of early forms of mobile payments and the anticipation of forthcoming mass market initiatives has whetted the appetite of consumers.
“This research shows anticipation levels are running high and it suggests banks and retailers stand to gain significant competitive advantage from offering and accepting mobile payments early,” he said.
Zapp’s mobile payments service is used by retailers and banks.
A huge increase in switches
If seven million people changed their current account supplier over the next 12 months it would represent a huge increase in switches. Figures from the Payments Council revealed only 592,695 people switched their current account provider from 1 January 2014 to 30 June 2014.
In 2013 the Payments Council introduced a system that reduced the time taken to switch bank accounts from 30 days to seven days. While this in itself does not drive people to change, it does increase the likelihood of a customer switching should they be attracted by the offerings of another bank, such as mobile services.
Later, the Payments Council said the project was designed to increase competition by making it easier to change accounts, but success is not measured on the number of switches “because banks will offer more to retain customers.”
The introduction of genuine competition in the retail banking sector, which could be stimulated through mobile banking, may also push banks to replace legacy IT. The current mainframe technology that underpins banks could become a handicap in the digital world.