High street banks must get ready to face tough competition from mobile banking applications that are set to overtake their dominance by 2021. Data experts at Caci suggest that mobile banking’s growing popularity will not end anytime soon.
Better adoption of technology
Caci experts suggest that a larger number of people owning a smartphone could be one of the reasons why mobile banking is becoming so popular. Another reason is that older generations are now more open to technology. This is especially true for wealthier older families and individuals nearing retirement who are adopting new tech very quickly.
The proportion of users who depend on mobile banking applications has increased over the years, and it could go up to 71% by 2024. The proportion of branch users will continue to experience a steady decline. In the next five years, only 55% of users will use a branch. Around the year 2021, the mobile banking revolution will reach a tipping point as the number of customers using a branch will equal the number of customers using mobile banking. The percentage of users for either of the cases will 59% in 2021, but after that, the number of branch users will decline rapidly.
Apps supplement bank branch usage
Caci suggests that mobile banking doesn’t replace branch use. Instead, it supplements branch to use. Experts believe that even in the next five years, the number of people using a branch will still be over 50%.
In the Growth of Digital Banking 2019 report, Caci suggests that peer-to-peer lending will also bring new users to the savings market. The report’s author and Caci associate partner Jamie Morawiec said that digital and mobile banking is the future. They present a massive potential for financial institutions to launch into untapped markets and appeal to younger customers who do not have a savings account yet.
Morawiec said that the growing popularity of P2P lending and the rising number of challenger banks will ensure that the banking landscape changes for traditional institutions. Banks need to offer a tech-driven and seamless user experience to ensure that they continue to cross-sell the savings account. He said that the speed and convenience of mobile banking help users in making transfers and checking their balances more easily.
He noted further that rapid technological change will be experienced in the upcoming decades as people will get access to a larger number of ways to manage their finances, their needs, and lifestyle.