- Digital innovation reshaping customers’ 24/7banking experience
- Customers logged into banking mobile apps 5.5 billion times in 2017- a 13 per cent increase from 2016 with an estimated annual average of 275 log-ins per customer
- Over 5.5 million webchats with customers in 2017- a 24 per cent increase on the previous year and the equivalent of 622 per hour
- Customers set to benefit from technology such as voice activation and data analytics
It may be taboo to talk about money with friends and family but when it comes to your bank it’s a different matter, with today’s social media savvy consumer taking advantage of more banking webchat services than ever before, according to the latest research from UK Finance.
The Way We Bank Now report, sponsored by EY, reveals that the popularity of services such as Twitter, Facebook messenger and WhatsApp, is encouraging banks to invest in similarly fast and convenient webchat services with customers embracing online support – major banks had over 5.5 million webchats with customers in 2017, the equivalent of 622 per hour.
Helping customers wherever they are, be it via video banking or call technology, tablet computers or online mortgage application services alongside pop-up, micro and mobile branches, is a sentiment increasingly adopted by the banking industry as it seeks to respond to customer demand for accessibility 24/7. In coming years video banking and voice activation will become even more prominent.
Overall in recent years digital innovation has transformed the way we manage our money – in 2017 customers logged into apps over 5.5 billion times, a 13 per cent increase since 2016 – and increasingly customers are utilising new technologies to talk to experts outside conventional bank branch hours rather than taking time out of their working day.
Stephen Jones, Chief Executive, UK Finance said: “Technology is changing the way we communicate, work and shop and, as a result, the way we choose to manage our money. The industry has responded to this seismic social change, which is very much led by customers looking to make the most of digital innovation for convenience. The assumption that British consumers shy away from talking about money looks to be consigned to the last century, as webchats and video banking prove increasingly popular. And with over 22 million British customers having downloaded banking apps, this trend is not going away.
“It doesn’t stop there however. Banks are looking at analytics, the internet of things (IoT), virtual assistants and other technologies as customers’ desire for convenience drives a shift towards an increasingly digital world. Over the next few years Open Banking and artificial intelligence will change the relationship we have, not only with our banks but also how we fundamentally access and utilise financial products and services.”
Dan Cooper, UK Banking & Capital Markets Leader, EY said:
“Digital innovation is transforming how we engage with our banks – we’re now able to make payments and communicate with our bank at times which suit us through increasingly sophisticated apps and webchat services. Given how busy people’s lives are nowadays, this is proving to be a real game changer. What’s great to see is that people of all ages are taking advantage of these latest innovations. Perhaps unsurprisingly, millennials are currently the biggest adopters, but the stereotype that tech only appeals to the younger generations is being proven to be just not true anymore, with almost half (49%) of 65 yearolds now using online banking. The pace of change is only set to quicken over the next few years as the likes of Artificial Intelligence and Open Banking bed in, which if implemented well, will truly revolutionise the way the British public banks once more.”
Today’s banking in numbers
The report also identifies customer banking trends. Britons are increasingly turning to their smartphones, with 22 million using a banking app in 2017, up from 19.6 million in the previous year. There were over 5.5 billion log-ins to banking apps in 2017 an increase of 13 per cent on the previous year.
Customers are using mobile apps which go beyond just checking their balances; the data shows more than half (51 per cent) of users are paying bills, three-fifths (62 per cent) transfer money to friends and over a quarter (27 per cent) to set up standing orders. Customers also received 512 million SMS alerts, ranging from notifications on new payments into their account as well as warning ahead of annual payments, a useful reminder if they wish to cancel subscriptions.
Age is no barrier
Online banking is proving popular across all age ranges. Almost half (49 per cent) of 65-year olds are banking online. Uptake on mobile banking is most popular for ‘millennials’ with almost six in ten (59 per cent) of 16-24 yearolds and 69 per cent of 25-34 year olds using their smartphones.
The convenience of banking online and through the increasing popularity of apps has led to fewer transactions through branches. The data shows an average bank branch saw a 26 per cent drop in visits since 2012 (140), equating to 104 visits per day in 2017.
The Way We Bank Now report can be accessed here.
Bank of England’s Haldane says inflation “tiger” is prowling
By Andy Bruce and David Milliken
LONDON (Reuters) – Bank of England Chief Economist Andy Haldane warned on Friday that an inflationary “tiger” had woken up and could prove difficult to tame as the economy recovers from the COVID-19 pandemic, potentially requiring the BoE to take action.
In a clear break from other members of the Monetary Policy Committee (MPC) who are more relaxed about the outlook for consumer prices, Haldane called inflation a “tiger (that) has been stirred by the extraordinary events and policy actions of the past 12 months”.
“People are right to caution about the risks of central banks acting too conservatively by tightening policy prematurely,” Haldane said in a speech published online. “But, for me, the greater risk at present is of central bank complacency allowing the inflationary (big) cat out of the bag.”
Haldane’s comments prompted British government bond prices to fall to their lowest level in almost a year and sterling to rise as he warned that investors may not be adequately positioned for the risk of higher inflation or BoE rates.
“There is a tangible risk inflation proves more difficult to tame, requiring monetary policymakers to act more assertively than is currently priced into financial markets,” Haldane said.
He pointed to the BoE’s latest estimate of slack in Britain’s economy, which was much smaller and likely to be less persistent than after the 2008 financial crisis, leaving less room for the economy to grow before generating price pressures.
Haldane also cited a glut of savings built by businesses and households during the pandemic that could be unleashed in the form of higher spending, as well as the government’s extensive fiscal response to the pandemic and other factors.
Disinflationary forces could return if risks from COVID-19 or other sources proved more persistent than expected, he said.
But in Haldane’s judgement, inflation risked overshooting the BoE’s 2% target for a sustained period – in contrast to its official forecasts published early this month that showed only a very small overshoot in 2022 and early 2023.
Haldane’s comments put him at the most hawkish end among the nine members of the MPC.
Deputy Governor Dave Ramsden on Friday said risks to UK inflation were broadly balanced.
“I see inflation expectations – whatever measure you look at – well anchored,” Ramsden said following a speech given online, echoing comments from fellow deputy governor Ben Broadbent on Wednesday.
(Editing by Larry King and John Stonestreet)
Bitcoin slumps 6%, heads for worst week since March
By Ritvik Carvalho
LONDON (Reuters) – Bitcoin fell over 6% on Friday to its lowest in two weeks as a rout in global bond markets sent yields flying and sparked a sell-off in riskier assets.
The world’s biggest cryptocurrency slumped as low as $44,451 before recovering most of its losses. It was last trading down 1.2% at $46,525, on course for a drop of almost 20% this week, which would be its heaviest weekly loss since March last year.
The sell-off echoed that in equity markets, where European stocks tumbled as much as 1.5%, with concerns over lofty valuations also hammering demand. Asian stocks fell by the most in nine months.
“When flight to safety mode is on, it is the riskier investments that get pulled first,” Denis Vinokourov of London-based cryptocurrency exchange BeQuant wrote in a note.
Bitcoin has risen about 60% from the start of the year, hitting an all-time high of $58,354 this month as mainstream companies such as Tesla Inc and Mastercard Inc embraced cryptocurrencies.
Its stunning gains in recent months have led to concerns from investment banks over sky-high valuations and calls from governments and financial regulators for tighter regulation.
(Reporting by Ritvik Carvalho; additional reporting by Tom Wilson; editing by Dhara Ranasinghe, Karin Strohecker, William Maclean)
Britain sets out blueprint to keep fintech ‘crown’ after Brexit
By Huw Jones
LONDON (Reuters) – Brexit, COVID-19 and overseas competition are challenging fintech’s future, and Britain should act to stay competitive for the sector, a government-backed review said on Friday.
Britain’s departure from the European Union has cut the sector’s access to the world’s biggest single market, making the UK less attractive for fintechs wanting to expand cross-border.
The review headed by Ron Kalifa, former CEO of payments fintech Worldpay, sets out a “strategy and delivery model” that includes a new billion pound start-up fund and fast-tracking work visas for hiring the best talent globally.
“It’s about underpinning financial services and our place in the world, and bringing innovation into mainstream banking,” Kalifa told Reuters.
Britain has a 10% share of the global fintech market, generating 11 billion pounds ($15.6 billion) in revenue.
“This review will make an important contribution to our plan to retain the UK’s fintech crown,” finance minister Rishi Sunak said, adding the government will respond in due course.
The review said Brexit, heavy investment in fintech by Australia, Canada and Singapore, and the need to be nimbler as COVID-19 accelerates digitalisation of finance all mean the sector’s future in Britain is not assured.
Britain increasingly needs to represent itself as a strong fintech scale-up destination as well as one for start-ups, it added.
The review recommends more flexible listing rules for fintechs to catch up with New York.
“Leaving the EU and access to the single market going away is a big deal, so the UK has to do something significant to make fintechs stay here,” said Kay Swinburne, vice chair of financial services at consultants KPMG and a contributor to the review.
The review seeks to join the dots on fintech policy across government departments and regulators, and marshal private sector efforts under a new Centre for Finance, Innovation and Technology (CFIT).
“There is no framework but bits of individual policies, and nowhere does it come together,” said Rachel Kent, a lawyer at Hogan Lovells and contributor to the review.
Britain pioneered “sandboxes” to allow fintechs to test products on real consumers under supervision, and the review says regulators should move to the next stage and set up “scale-boxes” to help fintechs navigate red tape to grow.
“It’s a question of knowing who to call when there’s a problem,” Swinburne said.
($1 = 0.7064 pounds)
(Reporting by Huw Jones; editing by Hugh Lawson and Jason Neely)
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