30 Jul The way we bank now
We’re going to need to think more like technology companies and maybe a little less like banks… Are the leaders committed? Are they digitally fluent? Have they digitally reimagined their business?
The steady, organic growth in Handelsbanken’s branch network illustrates that British customers value having face-to-face access to experienced bankers who understand them and the local market, and who can make all the big decisions regarding their banking requirements. These days, customers also expect the options to bank online, via mobile app or over the phone whenever it suits them to do so, especially for simple, familiar transactions. We see these as digital meeting places and design them to complement and reinforce the customer’s relationship with their local branch team, ultimately helping us deliver first class customer service.
Banking on the move
The smartphone is radically changing the way millions of us live our lives in many ways – and the way we bank is no different.
Since they emerged four years ago, banking apps allowing us to check our balance, make payments and perform a range of other functions on the go have been downloaded nearly 23 million times.
In the past year alone that figure has grown by 8 million – a download rate of more than 930 an hour for 12 months.
Halifax saw the number of log-ins on its mobile banking app rise to almost 40 million during March of this year – nearly twice as many as in the same month a year before. Many of us seem to love the convenience of being able to check our balance with a quick log-in that takes a few seconds, wherever we are and whenever we like. Tesco Bank says its customers log-in some 450,000 times week.
Apps are now eclipsing internet banking for a growing number of customers. Nearly two-thirds – 65% – of all online banking by Halifax customers is now conducted by smartphone, significantly more than personal computers (26%) or tablet computer (9%).
George Charalambous, head of mobile banking at HSBC, sees clear differences between what customers want from a mobile app compared with internet banking.
On our personal internet banking service you can do pretty much everything you can do with a member of staff in branch,” says Charalambous. “But I don’t want to put all of those services onto an app because that will slow it down.
“Mobile banking needs to be neat, agile and fast. The skill is to pick the right transactions.”
It’s not hard to see why banking apps have become so popular. Transfers that before you would have to make by visiting a branch or telephoning a call centre can now be done in the palm of your hand.
Take-up of mobile banking services is increasing – and so too is their sophistication. Barclays’ app now clearly displays the unsecured credit limits for many of its customers. This is a level of transparency a world away from how personal credit decisions were made in the past.
“In the old days the customer would have had to come into a branch and undergo a detailed application process, even though their credit rating had probably already been decided elsewhere in the bank,” says Matt Hammerstein, head of client and customer experience at Barclays.
“A tile on our app now proactively makes customers aware of how much they can borrow, leaving them to decide whether this is the right time in their life to take on some more credit… without even entering a branch.”
This faster, more transparent loan application process ensures that a customer can have funds deposited into their account in just a few minutes and by merely making a few clicks.
There are many instances in which this speed and control of our finances isn’t just useful – it can save us money.
Imagine you have been looking at cars in a local dealer when
you stumble across a vehicle ideal for your needs. You don’t have the funds to buy the vehicle outright and before long you are looking at the terms of a finance package offered by the car’s manufacturer as you haven’t had a chance to go into a nearby bank branch. Frankly, it’s not a great deal.
Now, many of us can apply to borrow the money from our bank through our mobile app and receive the funds into our account without leaving the car dealer. Because the bank has a clearer understanding of your risk profile you are much more likely to be able to borrow these funds at a lower interest rate.
Similarly, if you are a Halifax customer, you can use its online car finance platform to prearrange secured financing for a car you plan to
buy and have the money transferred to a dealership once a sale is agreed.
These faster credit application processes are proving popular. A third of all Barclays personal loan applications are now approved without the customer needing to visit a branch.
HSBC has gradually added services to its app, including the ability to apply for credit or to manage their ISA. There are plans to allow customers to extend their overdraft from a mobile phone.
“Say for example you were at a retailer at the weekend before payday and you saw a deal on an appliance you need,” Charalambous explains.
“Wouldn’t it be much better if you could just open your app and extend your overdraft there and then, without having to make a call or step into a branch? That’s exactly the sort of fast, helpful innovation we’re looking at.”
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