Mobile software is replacing bank branches and cash as youngsters prefer apps
Mobile banking apps are used by 69% of young people to manage their finances in the UK, which goes some way to justify the branch closures being made by the UK’s large banks.
Just over half (53%) of those between the ages of 18 and 34, known as millennials, are using these mobile apps regularly, according to research of 2,000 people in the UK by Visa.
In the UK as a whole, taking in all age groups, it found 38% regularly use apps to bank. The British Banking Association recently revealed over 19 million people in the UK regularly logged on to mobile banking apps in 2016.
With banks reducing the number of branches and support staff, mobile apps are becoming more important for customer services. Figures from the European Banking Federation (EBF), which include the UK, revealed more than 9,000 bank branches were closed in 2016, and more than 50,000 people working at those banks lost their jobs.
Meanwhile, the ability to make small, quick payments to people is reducing the need for cash. The Visa survey revealed that 59% of British millennials have made a peer-to-peer payment to somebody on their phone. This is on top of less demand for cash as a result of contactless card and phone payments increasingly used to pay for low cost items.
Again, it is millennials driving the payment revolution. Only 30% of the total surveyed group have made peer-to-peer payments.
In July 2017, research by the British Retail Consortium revealed cash is no longer the most used payment method at UK retailers. Driven by contactless technology, debit cards accounted for more of the 19 billion total transactions in 2016.
Jonathan Vaux, executive director of Innovation Partnerships at Visa, said that until relatively recently, simple transactions such as transferring money between accounts meant visiting a bank branch in person.
“We are now seeing banks embrace the flexibility offered by apps to reduce the pain points for customers and allowing them to stay on top of their finances while on the move. In essence, anyone with a smartphone or tablet is now able to take their bank branch with them wherever they go.”