LONDON - Britons are using Internet and mobile banking for transactions worth nearly 1 billion pounds (S$2.1 billion) a day and branch use is falling sharply, according to the British Bankers Association and accountancy firm EY.
In response, banks are expected to close more unprofitable branches while they invest in mobile and online services for customers who want to bank while on the move.
Internet and mobile banking is now used for transactions worth 6.4 billion pounds a week in Britain, up from 5.8 billion last year, the report showed. Banking apps for mobile devices have been downloaded more than 14.7 million times - up 2.3 million just since January - while Internet banking services are typically receiving 7 million log-ins each day.
Royal Bank of Scotland said last month it was inevitable that it would close more of its 1,900 branches after branch transactions fell by 30 per cent over the past 3 years. Barclays, Lloyds and HSBC are also expected to close branches, according to industry sources.
The Campaign for Community Banking Services, a lobby group, has warned that further closures could have a damaging impact on rural communities that rely on local branches for banking services and called for measures such as branch sharing to avoid the last branches left in a particular area being shut down.
But the BBA said branches would remain integral to banking in the 21st century. It said 2,274 bank branches had been refurbished in the past two years, underlining banks' commitment to their high street outlets. "Day-to-day branch use is falling sharply and while the size of these networks will decline, high street outlets will remain important for those bigger moments, such as when a customer takes out a mortgage, wants to assess their financial options or resolve a complaint," the report said.
Banks are looking to automate more basic banking services within branches, such as withdrawing and depositing cash and paying bills, freeing up staff to focus on offering advice. But Paul Adams, chief executive of Glory Global Solutions, which provides self-service machines for bank branches, said British lenders have yet to fully grasp the opportunity provided by new technology to improve customer experiences. "New technology allows and permits branches to be more open plan in the way they are presented. There is an opportunity here with some of this technology to really drive up the services provided to customers," he told Reuters.
RBS said last month that over 400 of its branches across Britain would be fitted with new technology including iPads so that customers can register and access online banking.
Industry sources say a surge in the popularity of mobile banking applications is the main driver behind the rise in digital transactions. One senior banking executive told Reuters the growth in mobile transactions has been "phenomenal" over the past two years. Consultancy Juniper Research expects the number of customers using mobile phones for banking to exceed those banking via their personal computer for the first time in 2019.
The BBA report also forecast spending on contactless cards would rise to 6.1 million pounds a week this year from 3.2 million in 2013.