Digital banks such as Monzo and Revolut have amassed millions of customers throughout the UK and across Europe over recent years. These ‘banking alternatives’ report millions of accounts between them in the UK alone, with their rapid growth being born from an inability from traditional banks to adapt and better serve their customers with better tech solutions. You could even argue that big banks got lazy.
Who uses mobile banking?
Currently, most app-only banks are loss-making, and a large part of their problem is that account holders do not use the service as their primary account for salary payments or savings, instead choosing to take advantage of some of the perks on offer such as cheaper foreign exchange rates or lower ATM withdrawal fees abroad.
Not surprisingly, young millennials and families, usually under 35 years of age, are the largest mobile using group.
Who is being left behind?
The “low-income” elderly are naturally being left behind and getting a worse service and rates as a result. This group is usually made up of people who are less willing to adapt to change. They enjoy visiting a bank on the high street or spending hours on hold for customer service, as oppose to using a chat app.
Will these challenger banks overtake the high street
Mobile banking is will undoubtedly be more popular than visiting the local high street bank branch within two years, highlighting how technology is changing the way us British choose to bank.
In 2021, the number of customers regularly using their smartphones to access financial services will overtake those visiting their local branch, according to data by consultancy Caci.
Whether the big banks choose to invest in their infrastructure to compete with the services that these new challenger banks are offering remains to be seen. However, one fears that failure to adapt quickly enough, coupled with an air of complacency, could well see some banks falling foul of their inflexibility and become the next “Blockbuster video”.