While visiting a branch consumes more time and effort compared to mobile banking, around 63% of Britons aren't very keen on dealing with mobile-only banks, a sentiment shared by Franks, Belgians, Hungarians, Kiwis and the Dutch. With a number of services available right now in your pocket, it seems strange why people should dither from using mobile banking apps when they use the same for making contactless payments, purchasing goods and tickets on a increasing scale.
Bank branches set to disappear as youth turn to mobile banking
According to a research study conducted by Nielsen, there are various reasons why people don't want to entrust all their money with online services and apps. As many as 58% of those who don't want mobile-only banks said that they had security concerns while the rest said that they simply didn't need mobile banking. One in every five also said that they still prefer visiting their branch than using mobile banking.
“The reality is that mobile-only banking is most likely to take off in developing countries where the majority of the population don’t have bank accounts or easy access to physical branches. However, there’s still a good opportunity in Britain, particularly if banks can overcome the general unease about sharing financial information digitally by convincing people that mobile banking is as secure as going into a branch. It’s then that the sheer convenience of mobile banking could make many reconsider,” said Stuart Tagg, financial services leader at Nielsen Europe.
Despite what most people think, a number of mobile-only banks have sprouted in the UK over the years. The Atom Bank is the UK's first mobile-only bank, letting users open new accounts in just a few clicks, giving accurate pictures of interest rates, letting people log in using face and voice recognition and offering 24/7 support. Other mobile-only banks include Monese, Osper, Monzo and Starling which are offering various customer-friendly services to gain ground over traditional brick and mortar banks.
While the Nielsen study didn't talk about preference for mobile-only banking for different age groups, a research study conducted by Gemalto last year revealed that among the younger generation, 62 per cent customers use their smartphones and tablets for their banking needs. Over a quarter of the respondents interviewed stated that they never visited their branch and that mobile banking was essential for their needs. Thanks to the preference towards mobile banking, a staggering 1487 bank branches were closed down in the United States in 2014, and in the UK, HSBC alone took out 47 branches with another 19 branches earmarked for closure last year.
Soon you will be able to make mobile payments using your voice
Given the ease of access and large number of services available through mobile banking, customers are afforded many choices unlike in the past. Banks that do not offer mobile apps or adequate services are at a greater risk of losing their customers to rivals who offer these services. A staggering 37 per cent of respondents said that they would change their banks if mobile banking services were not up to their expectations. Over a million users switched their banks in the UK in 2014 alone, a rise of 20 per cent over the previous year.
The two conflicting research studies make it clear that a majority of Britons prefer banks which run physical branches as well as user-friendly mobile apps. The lure of physical branches may be felt more by middle-aged or older Britons who've used them for decades but for the younger generations, mobile banking will hold sway probably for the rest of their lives.