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App-based banking continues its ascent in the UK

The number of people banking from their mobile phones is increasing as more services are made available through the channel

More than 19 million people in the UK regularly logged on to mobile banking apps in 2016 as more banking services became available on smartphones, according to a report from the British Banking Association (BBA).

The BBA research found that last year, 19.6 million people used mobile app-based current account banking, compared with 17.4 million a year earlier – an increase of 2.2 million.

Meanwhile, online browser-based banking increased by 1.2 million to 36.9 million users, while telephone-based banking use fell by a million people from 2015 to 2016.

Usage of certain app-based services has grown significantly over the past year. Last year, 86% more people used apps to manage their mortgages and investments than did so in 2015. Over the same period, use of app-based savings functionality rose by 30%, while credit card services via apps were accessed 46% more often.

The growing fintech industry is creating user-friendly apps that people are taking up in their droves. In the past, banks would often introduce services just to tick a box, but today they are investing heavily in fintech companies to ensure they can provide user-friendly, mobile-based services. At the same time, new challenger banks are arriving on the scene with technology as their main differentiator.  Some of these banks, such as Starling, are fully app-based.

Adding services to mobile banking apps is key to increasing their use. The study showed that for services such as checking balances, there has been no increased use of apps, with 97% of app users doing this in 2015 and in 2016.

But there has been a rise in the number of people using apps to pay money to other individuals, which grew from 47% to 60% of app users; transferring money between accounts, which was done by 64% of app users in 2016 compared with 51% in 2015; and 46% used an app to pay bills last year, compared with 37%  in 2015.

The BBA report said: “Greater choice in communication is also creating new, easier and faster interactions between customers and their banks. People can now access a range of services on their sofa, on the go or at work.”

It found that 4.4 million customer-to-bank contacts were made using web chat in 2016, as well as 434 million text alerts sent to keep people informed about their bank balance. Video chats also increased in popularity, it said.

Starling, one of a growing number of challenger banks in the UK, offers current accounts via customers’ smartphones, claiming to use the latest mobile and data technologies to support people’s digital lifestyles. 

Separate research from analyst company CACI this week revealed that by 2022, the average person will visit a bank branch only four times a year. ........................................................................................................................

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