Tech consumer revolution happening in banking, says BBA

There is a “consumer led revolution” happening in the personal finance industry, according to a trade association for the UK banking sector.

The British Bankers Association’s (BBA) The Way We Bank Now report found we use mobile banking apps more than 7,610 times a minute, or 4bn times a year, in a dramatic increase in consumers using technology to manage their money.

In 2015 there were over 347m payments via mobile phone apps, which was a 54% increase from the year before and over 13.8m apps were downloaded, a 25% increase. Internet banking payments were up by 2% to 417m.

Banking apps were more popular than banking websites. Internet banking logins fell slightly to 4.3m last year to 4.4m in 2014. The report revealed that mobile apps were used 11m times a day in 2015, up from 7m.

BBA chief executive Anthony Browne said: “We are in the midst of a consumer-led revolution in the way we do our day-to-day banking. Customers love the new technology that is allowing us to bank round the clock.

“You can set up standing orders while standing in the queue for the bus and check your balance while checking in at the airport. The choice now on offer from banks, from state-of-the-art branches to cutting edge apps, has put customers firmly in the driving seat on the way we bank.”

People now have more contact with their banks than before as a consequence. The report found that digital baking reduced stress and made it easier for customers to manage their finances.

According to marketing company CACI the number of overall customer interactions, from visits to branches, telephone banking and using apps, with their bank increased from 2.3 time a month in 2011 to 6.3 times by 2021.

Robert Cubbage, UK banking and capital markets leader at Ernst & Young, which supported the report, said: “For the banks themselves this means there are now more opportunities than ever before to engage with customers. And so there are crucial decisions to be made about how they manage these increased touch-points through internet banking, mobile payments or their branches, and the quality of those interactions.

"Transformation is not without its challenges, but banks that can make the most of the new opportunities available to engage with their customers through digital, and the use of analytics and technology will be highly competitive in the new environment.”

Contactless card use also increased significantly by 250% since last year with £1.1bn spent in March 2016 alone. Banks issued 15m contactless cards in 2015, an increase of 54% the previous year.

Subsequently due to the rise of technology, the number of visits to bank branches fell to 278m in 2016 from 476m in 2011.

This is reflected in recent restructuring plans at UK banks. In June the Royal Bank of Scotland said they were to close 32 branches and in May, HSBC said it is to close more than 100 branches this year.