Digital-only banking boom predicted | Gladstone Brookes

Digital-only banking boom predicted

Digital-only banking boom predicted

New research predicts that a quarter of all Brits will have a digital-only bank account within the next five years.

Personal finance comparison site Finder.com questioned 2,000 adults across the country and found that 24% of those spoken to had already made up their mind to open a digital account with a further 21% saying it was likely once they had more information.

Open Banking

The survey was announced on the first anniversary of Open Banking in the UK – a system which allows banks to securely share customer account data with external companies to improve the products and services they offer.

More than 4.5 million people opened an account with a digital challenger bank in 2017, but it appears the change doesn’t suit everyone as the survey showed most people had no plans to move their account and one in five had no idea what a digital-only bank was.

Just over 60% said they didn’t want to move because their current bank has treated them well.

Half of those spoken to also said they preferred the option of speaking to someone in person while conducting their business.

Not interested

Finder.com chief executive Jon Ostler said: “Our research also showed that a lot of Brits still aren’t interested in taking all of their finances online.

“Open banking, for example, is only a year old and some people may not be comfortable with having their data shared between companies yet.

The problems that large banks have had with ‘digitalising’ their services also doesn’t help the image of online banking.”

Ease and convenience

But those who have taken the plunge said it was the ease and convenience of the operation which attracted them.

A third also believed the rates paid for services were better than those likely to be offered by traditional banks.

Said Mr Ostler: “When you consider how long the banking industry went without any real technological advances or change to the status quo, the speed that digital challenger banks have established themselves has been very impressive.

Speed, convenience and transparency

“When done right, digital banking can offer customers the speed, convenience and transparency that is becoming increasingly important for consumers in most sectors.

“It will be fascinating to see how the sector evolves over the next few years, and if it can cope with the increasing consumer demand that we expect to see.”

Branch closures

There is no indication yet of how much the digital revolution with affect the rate of bank branch closures.

The Office for National Statistics (ONS) revealed recently that a third of all bank branches across Britain have been closed in the last eight years.

More than 13 million people have lost access to their local branch since 2010 with over 6,000 being closed across the board.

Telephone and online

The rise in popularity of telephone and online banking has been blamed for what experts have called a radical change in the way we use our banks.

In 2017 debit cards with contactless payment facilities exceeded cash transactions for the first time.

The ONS survey revealed more than two thirds of British adults now use mobile or online banking instead of making the traditional visit to a branch.

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