Online banking is the most valued, and most used digital service by consumers – and it’s clear to see why.
Digital services and applications have already revolutionised the financial services (FS) industry, changing the way consumers access information and interact with organisations.
As part of our Digital Inside Out research, we did a deep dive into how the sector was engaging both customers.
We found online banking was the most used and most valued digital tool (67% and 63% respectively) across the seven sectors we examined. On top of this, the sector’s digital tools were acknowledged as the most important in consumers’ day to day lives (62%) and the one they are most satisfied with (64%).
What’s the story behind this success? The banks looked to digital early on as a way of engaging with customers – as boardrooms looked to tackle the challenge of a reputation crisis and new entrants to the market.
Look back just a few years and to check your balance or transfer money you would have, visited your branch, used an ATM or gone through the telephone banking process. Now however, there are new options available, including both online and mobile banking.
Current account customers are predicted to use their mobile devices more than Internet, branch and telephone banking combined by 2020, according to the British Bankers’ Association (BBA) and consultancy firm EY.
We used mobile banking apps to transfer £2.9 billion through smartphones and tablets in March alone – an increase of 50% on the year before, according to the same study.
On top of this, British bank customers logged on via mobile devices 73.8 million times a week by the end of March, up from 18.6 million times a year earlier and 9.1 million times in 2013. That is phenomenal growth.
It underlines that digital has come on leaps and bounds, and also shows there is still huge potential for further innovation. Public appetite for digital services is only set to grow with more people than ever using a smartphone as a tool to manage increasingly busy lifestyles.
The big banks have been innovators when it comes to digital – but what can other sectors learn from this success story?
There is clearly a significant and growing level of investment being made by the sector, born out of necessity, but they are quickly reaping the benefits.
For sectors not yet grasping digital, they need to see it as a way of engaging and retaining their customer base – and they need to make that investment.
Digital is disrupted every sector it touches – you only have to look at what has happened to the taxi industry with the likes of Uber and Hailo. If you fail to act, you risk losing your customers, or being forced out of the industry altogether.
The big banks have so far been able to mitigate the rise of new challengers, and in my view their use of digital services has had a big part to play with that.
However, there are still challenges which remain for sector as a whole, and the smaller players in financial services need to step up to Britain’s digital evolution.
We found smaller banks, building societies and insurance companies are somewhat lagging behind their larger counterparts in digital, and there is a risk they could be squeezed out of this competitive market.
They cannot afford to be left behind, underlined by the fact that four in ten consumers are using digital services in the financial services sector when the option is available.
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