A mobile future for banking

A mobile future for banking

London fintech firms are set to capitalise on the mobile banking boom as customers continue to use apps to manage their cash "on the go" as opposed to using banks' websites.

Mobile banking apps are being used around 7,610 times a minute as part of a "revolution" in the way people are monitoring their money, according to the British Bankers' Association (BBA).

The 'Way We Bank Now' report, which charts changing customer habits, said there were 347 million payments made using mobile apps in 2015 - up 54% on the previous year.

By contrast, the number of payments made using internet banking was up by just 2% in 2015 compared with 2014, with 417 million payments.

New figures in the report also show mobile banking apps are increasingly preferred to banks' websites, reflecting the trend of people using their phone to manage their cash while they are out and about rather than sitting at a computer.

This changing face of banking has provided a major boost to the capital’s fledging fintech sector which is home to hundreds of disruptive start-ups, from companies facilitating payments for goods and services to firms providing the infrastructure essential to the operation of the world’s financial institutions.

One such firm is London-based Starling Bank; a new, digitally-native mobile bank, which will officially launch in January after recently bagging its UK banking license. The bank is part of the next-generation of banks, disrupting the traditional banking model and streamlining the way consumers manage their money.

The idea behind Starling Bank was conceived by former COO of Allied Irish Banks Anne Boden back in 2011. After a year spent travelling the world and seeing the latest developments in technology, Anne realised that the real-time customer experiences we are accustomed to in life, were missing when it came to traditional banking. However, working within the systems of traditional banking, it was all but impossible to bring the same transformation to how people manage their money.

Five years since Boden decided to bring the idea to life, the gamble is looking to have paid off. She told BQ: “The BBA report has shown a consumer-led revolution in mobile banking, which is not surprising. People are now used to running their lives from their smart phones and don’t see why their financial lives should be any different.

“At Starling, we have been well aware of this trend and the opportunity it brings if we get the customer experience right. We have just received our UK banking licence and have been building our platform and the technology that sit behind it from scratch, ready to launch in January next year. We’re excited about taking the next generation of banking to customers and helping them to have a clear, easy view of their overall financial picture.”

And the transformation Boden speaks about is already in full swing. Only today Lloyds Bank revealed plans to cut 3,000 jobs and close 200 branches as the lender braces for the future which, for the larger players, looks somewhat uncertain.

Speaking after the launch of the BBA research, Robert Cubbage, UK banking and capital markets leader at EY, which supported the report, said: "It's a challenging but truly transformational time for banking. The sector is evolving fast, with almost all areas of financial management becoming simpler, more accessible and more dynamic for consumers."

The BBA research also showed internet banking logins fell slightly last year - at 4.3 million a day in 2015 compared with 4.4 million in 2014 and mobile device apps were used 11 million times a day in 2015, up from seven million a day in 2014 - equating to around 7,610 times a minute.

More than 13.8 million apps were downloaded in 2015 - a 25% increase on 2014.

 

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