Ariane Poulain, Policy Adviser from the BBA gives us a behind the scenes look at the latest Way We Bank Now report.
The rising customer-led demand for digital innovation in banking and the pace of adoption sparked the BBA’s decision a few years ago to launch a new annual report – Way We Bank Now. The series looks at growth and trends in digital banking technology and today, the BBA, sponsored by EY, have published the third report in the series – Way We Bank Now: Help at Hand.
Back in 2014, the inaugural Way We Bank Now showed customer use of banking apps had doubled in a year, and in 2015 the second report highlighted that customers were interacting with their bank 50% more compared to 2010. In these previous reports, the BBA found customers were readily embracing technology in banking and there were more ways than ever to access their money. Now, in this year’s report, we have found that digital innovation is continuing to rise at a dramatic pace and how digital banking technology is no longer just about providing customers with more ways to access their money but about the potential of these channels to help people manage, move and save their money in more ways than ever before.
Over the past six months, we’ve been collecting data, case studies and conducted interviews with banks right across the UK banking industry to understand changing customer habits and the latest technological innovations being introduced. You can track your spending on a banking app and receive an instant notification when you make a purchase. You can sit on your sofa and speak to a mortgage adviser via a video link. You can make a payment using internet banking. A prominent theme quickly emerged as we were gathering all this information for the third Way We Bank Now report. Driven by consumer demand, digital innovation in banking was about giving us – the customer – the flexibility to manage our money on our terms.
Of course, we all have our own preferences when it comes to managing our money and which channel we prefer to use to interact with our bank – however, data provided by CACI showed that, fascinatingly, customers are interacting with their bank more and more. Whether using a bank branch, telephone, internet or mobile banking – in total, the estimated number of customer interactions with their bank on average per month is rising. In 2016, customers interacted with their bank 3.5 times a month, up from 2.3 times in 2011, and is estimated to continue rising over the next five years; by 2021, customers will interact with their bank 6.3 times a month.
The rise in customer interactions with their bank is a clear reflection of the growing customer appetite for digital, as revealed by this year’s report. Customers used mobile banking apps more than 7,610 times a minute in 2015 – a rise of 50% from 2014. Customers spent £1.1 billion using contactless cards in March 2016 – an annual rise of 250%. And payments using mobile apps and internet banking were both up in 2015 compared to 2014. The report suggests that the popularity of all forms of digital banking is because the customer experience is now easier and less stressful. This supports Lloyds Banking Group research which showed 86% of people who manage their money online worry less because they find it easier to keep track of their finances.
In short, this is not innovation for innovation’s sake. This is a customer-led revolution for faster, convenient and more helpful banking services.