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July 22, 2016

First the high street, now the desktop: Internet banking in decline as customers switch to mobile banking apps

News: Customer demand for new technology forcing banks to advance banking apps.

By James Nunns

The number of people using Internet banking has fallen as customers switch to mobile applications.

This marks the first time that the use of Internet banking has fallen but highlights a significant shift in the way that customers now interact with their banks.

According to figures from the British Bankers Association customers on average logged on to banking websites 4.3 million times a day in 2015, down from 4.4 million in 2014 while the use of apps went up from seven million logins a day in 2014 to 11 million last year.

Banking apps were used four billion times in 2015.

Michael Allen, Solutions VP, Dynatrace, said: “Mobile banking is particularly popular with the younger smartphone natives; the generation that will become the lucrative banking customers of tomorrow.

“From taking out student loans to fund education and credit card spending on travel, right through to the time when they come to get a mortgage, it is this generation who will be most profitable in the years to come. Getting mobile right is therefore increasingly important.”

Switching to a more app focused banking service is something that banks will have to consider in order to help maintain customer satisfaction, but doing this is not as simple as just creating an app.

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“Protecting the performance of a mobile application once deployed is easier said than done, as the service is at the mercy of external factors, such as the behaviour of a user’s device or network. To protect the user experience successfully, banks need the ability to profile user behaviour in relation to experience and monitor the underlying performance of their transactions across a range of devices and locations,” said Allen.

Although there is increased use of banking apps most customers still use Internet banking to make payments.

In 2015 there were 417 million Internet payments, compared to 347 million payments on an app.

This is likely because customers are still required to log in to their bank’s website if paying a new person.

While it may still be a little more complex to make a payment there are a number of app-based challenger banks that are aiming to simplify this process.

Challengers such as Mondo, Starling, Atom, and Tandem have all been working to deliver an app-only banking experience that brings banking into the modern world.

Last year the number of payments via apps rose by 54% while payments via websites only rose by 2%.

The shift in the way that customers are looking to access their accounts is forcing banks to re-think their strategies when it comes to engaging with customers. More focus is being placed on developing app features that customers want.

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