NEWSBYTE: UK consumers are increasingly turning to mobile banking, ahead of banking online via their computers, according to a report by industry analyst CACI.
The fact that many customers now favour the speed and convenience of managing their money digitally is no surprise, but the rate at which mobile migration is happening outstrips previous predictions.
The report anticipates that there will be 35 million (72 percent of the UK adult population) mobile banking users by 2023. This is up from the 8.5 million (one in six current account holders) recorded at the time of CACI’s 2014 report, and 22 million last year.
Younger users drove early mobile banking adoption, but the demographic has changed over time, says the report:
Younger individuals were the early adopters, and generated the majority of the initial mobile growth. These groups were quickly joined by middle-aged and family demographics, particularly those with above-average income, who over the last two or three years have shown the most dramatic levels of migration.
Three of the older segments – consumers in the ‘Mid-Life Social Renters’, ‘Asset Rich Greys’, and ‘Road to Retirement’ categories, all typically aged 50+ – will see the strongest growth over the next five years, as will users in rural areas.
The report also predicts that, while branches will continue to be important in the multi-channel banking world, a bank will need just 600 branches to maintain adequate national coverage in the UK.
Internet of Business says
Several UK startup banks have been quick to recognise the shift to mobile banking, on the back of the arrival of the second Payment Services Directive (PSD2) and open banking in January 2018.
Among them are Starling Bank and Monzo, whose mobile-only approaches and lack of legacy infrastructure have allowed them to innovate rapidly, offering new insights, free overseas usage, and marketplace collaboration opportunities.
With over 73 percent of the population now owning a smartphone, rising to nearly 80 percent in 2022, a mobile-first or mobile-only approach is increasingly attractive.
The banking giants are certainly mobilising in response. The ultimate winners will be those that can distinguish themselves with the quality of the insights and lifestyle services they offer. Advice on finance management, mortgages, savings, and the like (enabled by open banking) will take priority over minor interest rate differences.
And, as always, convenience is king in the new age of frictionless finance.