Swiftly moving past the age of scepticism for contactless payments, face recognition and machine learning through artificial intelligence, remote banking has manifested into a norm, shaping expectations when seeking a new player in the personal banking market. As traditional banks dissolve their regional standing and challenger banks swoop in to absorb their share of the market, the scales are slowing being tipped in favour of the latter.
Personal banking customers are shifting to a more technological way of operating, pushing high street banks to pump investment into remote banking facilities to retain existing customers and secure new clients. Consumers incorporate technology into each minute of their lives, from using voice commands to set household heating timers and control lighting, to questioning Alexa on the weather and adding an item to the digital shopping list. As a result, technology is inevitably making conventional banking methods redundant, explains David Tattersall of Handpicked Accountants.
Mobile banking to overtake high street branch visits
Findings produced by data firm, Caci, forecasts that by 2021, mobile banking is set to measure in line with high street bank visits, as older, wealthier generations and those reaching closer to retirement begin to embrace technology. As a result of the increase in smartphone ownership, 59 per cent are set to use mobile banking in 2021, with branch visits equally hitting 59 per cent. Flitting three years forward to 2024, 71 per cent are set to use mobile banking apps and a smaller 55 per cent to remain using high street bank branches.
As consumers move to a more technological way of managing their finances, remote banking offers greater flexibility and convenience. The Growth of Digital Banking report produced by the global data firm shows that although more consumers are gaining a benefit from online banking, it is a supplementary service to traditional high street branches, not a replacement.
High street banks closing branches in 2019
On the contrary, Bank branch closures are rolling through at an alarming rate, as between January 2015 and August 2019, a total of 3312 branches faced closure, with another 100 due to close shop this year. This takes the average monthly closure figure to 55, reflecting a decline in traditional banking methods. This is unsurprising as more and more banks are beginning to invest money into online technology to enable you to open a bank account, perform bank transfers, request an overdraft and view pending transactions from the comfort of any given location through your mobile, desktop or tablet.
Selected banks are closing branches and in turn, reducing their overheads to reinvest funds into online platforms, making them user-friendly, enhancing functionality and making them compatible with the latest devices. Online banking allows you to keep a close track of incoming and outgoing funds, and set savings goals. As a result, younger challenger banks are appealing to the careful spenders and the conscious buyers, or those aspiring to be, by marketing intelligent features, helping consumers account for each penny and develop the habits of a wise saver.
The rise of challenger banks
Challenger banks are recently established banks competing against high street veterans, for example, Monzo, Atom Bank and Starling. Taking a closer look at Monzo in particular, it is a digital-only, mobile bank without any physical presence on the high street. The shopfront for the bank is their highly developed app which allows you to complete functions in addition to those already on offer on the high street.
Bursting with features not yet developed by legacy banks, Monzo allows you to visualise spending by splitting funds into spending and saving pots. In addition to this, the simplified application process is a game-changer as it can be completed from the comfort of your home, rather than visiting a physical bank branch. This shows a growing appetite for a remote banking service with no compromises on customer experience.
Investing in tech as challenger banks spearhead innovation
Popularity for remote banking facilities has pushed legacy banks to invest in technology and establish a platform which generates instant decisions on loans, overdrafts and bank accounts. As the sector takes strides towards developing technology, there’s less dependence on physical branches, resulting in fewer overheads and more money to invest in technology. Consumers can now access their financial data through the touch of a button, a scan of the iris or recognition of the face, through a phone, tablet or desktop.
Granting the ability to bank with no physical barriers gives the consumer flexibility to bank on the go. As expectations increase, the whole process; from sign-up, managing daily finances to logging queries remotely is favoured upon by consumers. As technology advances and security strengthens, consumer expectations are ever-changing and developing.
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The rise of remote banking has encouraged traditional banks to invest in technology to enhance services, put up a fight against challenger banks and keep retention levels at bay. As artificial intelligence and open banking enters the banking scene, customer control over their data has rapidly increased, including how customers bank, paving the way for remote banking.