The amount of money being moved via digital banking technologies in the UK will increase by 50% over the next five years, with mobile banking catching computer-based online banking fast.
Research from banking software maker Fiserv found that mobile apps currently account for £1.7bn moved every week in the UK and online banking £6.4bn. But the total will increase from £8.1bn to £12.8bn as mobile transfers double to £3.4bn and online banking reaches £9.4bn by 2020.
The research also predicts the number of mobile banking users will grow from 17.8 million to 32.6 million by 2020. It said the number of adults using online banking will increase from 27.7 million to more than 35 million.
The increased take-up of mobile banking is an opportunity for challenger banks to eat into the retail banking market share of the high street giants. With less need for bank branches as customers adapt to mobile banking, new banks can focus on delivering apps that meet customer demand.
The Future Trends in UK Banking report, which was completed by the Centre for Economics and Business Research, found that 34% of UK adults bank on their mobiles, with an expected increase to 60% by 2020.
“This projected increase of 14.8 million mobile banking users over the next half-decade represents a significant opportunity for challenger banks to bring their innovative business models to the market and for existing banks to add digital services to cater to this future majority,” said Fiserv.
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- The number of people using mobile and online banking will increase dramatically over the next five years, with major technology implications for banks.
It is essential that banks get the user experience right. Problems such as those experienced on 20 April 2015 by RBS Group, where customers of the bank and its NatWest and Ulster Bank arms were unable to use the mobile app as a result of an outage, could in the future be reason enough for customers to change bank.
Meanwhile, online banking is plateauing, with the 53% of UK citizens that use it expected to reach 66% by 2020, according to the Fiserv research.
A separate global study of 80,000 people, carried out by Bain & Company and published in December 2014, found mobile accounted for about a third of financial transactions in 13 out of the 22 countries surveyed. The study showed banking using a mobile device is taking over from online banking via a computer, which decreased by 3% in 2013.