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cost of channel shifting

cost of channel shifting

Digital innovation agency Adaptive Lab announced key findings from a new research report into the smartphone banking apps of five leading UK banks: Barclays, HSBC, Lloyds, NatWest and Santander.

In 2014, Adaptive Lab identified a gap in current understandings of both the functionality AND the user experience of smartphone banking apps. Utilising their expertise in the sector, the company undertook extensive research in order to provide a compelling detailed assessment of the quality of the smartphone banking apps.

An additional aim of the research was to benchmark the current smartphone app offering of each bank, identify areas for improvement, and suggest future opportunities to offer customers extra value. The research looks at both the functionality and the user experience to explore how well consumers are currently served by their banks, and in which ways they utilise the tools that are available to them. The result is a set of robust conclusions and essential guidance for capitalising on the mobile banking revolution.

frequency of usage

frequency of usage

James Haycock, managing director at Adaptive Lab, commented, “Extensive research and work has been undertaken at Adaptive Lab to achieve this study. It is a combination of primary and secondary research; with that of qualitative and quantitative research from a survey of over 400 nationally representative UK consumers, an expert heuristic review, user interviews and observations, and analysis of thousands of app store reviews from the iOS app store and Google Play.”

The report also sheds light on consumers’ expectations in terms of user experiences and responses towards the different functionalities of smartphone apps. The full research report offers considerable additional insight, including:

  • Detailed findings on each of the five apps reviewed, accompanied by screenshots
  • Strategic and tactical recommendations for app excellence in the near and longer term, applicable to all retail banks
  • Deep insight into how consumers use banking apps and what they value most.

Key findings of the research include:

  • Usage of banking apps has surged:

o    The quantitative research showed that more than 4 in 10 (43%) UK consumers use banking apps, and 34% use them at least once per week

o   19% of consumers would like to utilise their smartphones as their only banking touchpoint. These figure increases to 30% among 14-16 year olds

o     Of the consumers using mobile banking apps, 39% check them daily, compared to daily usage for banking websites that was only 27%

  • Functionality & Usability:

o     None of the banking apps scored more than 75% on either functionality (how many banking tasks people can do with the apps) or usability (how fast, easy and pleasant the app is to use and to understand). These scores were calculated based on the results of the user research and expert heuristic analysis.

o       The lowest scoring app rated just 32% overall, breaking down into 43% for functionality and 25% usability.

  • Choice driven by the lack of functionality as well as security:

o     The qualitative research enabled Adaptive Lab to gain insights into the fact that 25% of the consumers who don’t use banking apps are put off by the lack of functionality, whereas only 18% are concerned about security.

o     The lack of functionality highly influences consumers’ choice in deciding to utilise banking apps

  • Extra features:

o    The survey found that nearly two thirds (64%) of consumers would like to be able to see pending/upcoming payments

o   Over half (52%) would like to add new payees via their banking app, however currently only 1 of the 5 apps reviewed in the study allows users to add new payees and pay them through their account number and sort code. All apps reviewed offer the ability to pay someone via their mobile phone number, except Barclays, which offers this in a separate app. However, this payment process requires both parties to register before payments, unlike traditional payments to an account number and sort code.

release frequency

release frequency

Kat Matfield, service design and product manager, Adaptive Lab, who was leading the research commented, “2014 was a turning point in consumer behaviour, with smartphones overtaking laptops and desktops as the UK’s preferred tool for going online. Our research showed that 34% of UK consumers use a smartphone banking app at least once a week, and 17% at least once a day. Many industries have been impacted by this shift and consumer banking has been no exception: people are increasingly using smartphones as a key or, sometimes, only banking touchpoint.”

Kat Matfield added, “Overall, the generation of mobile apps currently available from these five leading UK banks leaves considerable room for improvement. If consumers are going to be able to manage and monitor their finances entirely from their smartphones, banks will have to make more functionality available on their apps and focus on improving the user experience.

At the moment, many banks treat their apps as a supplement to online banking, and offer only a subset of the functionality offered by their website. Although there are aspects of the apps that were reviewed that are visually attractive and user-friendly, most of these banking apps are to a certain extent limited in feature-sets and in providing a positive user experience.”

Smartphone ImageKat Matfield concluded, “Banks are already aware of the pivotal role apps can play in migrating customers to more cost-effective service channels, increasing retention and customer acquisition – but to fully realise these benefits banks will have to offer the stand-out user experience their customers have come to expect from apps.”

To download a summary of the report for free visit

About Adaptive Lab

Adaptive Lab is a digital innovation agency. ( ) The company partners with ambitious leaders at companies experiencing disruption, helping them to compete, innovate and grow. Adaptive Lab’s radically customer-centered approach brings design thinking, the lean startup, and agile product development together to deliver brilliant results in rapid timeframes. Adaptive Lab has worked with a range of brilliant companies, from early-stage start-ups to well-known PLCs, including Barclays, Experian, the Associated Press, 3 Mobile and ASOS. John Haycock, MD of Adaptive Lab will be launching his book ‘Bye Bye Banks’ in the next few months.

Global Banking & Finance Review


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