“The convenience of using mobile banking on tablets and smartphones means that customers tend to access their bank far more frequently” © Kumar Sriskandan/Alamy
This piece is from our special report on digital banking. Click here to read the second piece in the series, “The end of cash.” Click here to read the third piece in the series, “the digital race.”
Until relatively recently, the inventors of Homelink, the UK’s first home banking service in 1983, would have felt very much at home with modern digital banking. While relying on a television set and a home phone, instead of a website or a mobile device, Homelink allowed customers to send transfers and pay bills, services at the heart of digital banking today.
Despite the subsequent launch of the first online banking websites in the mid-1990s and incremental improvements thereafter, not a lot changed for online banking customers in the intervening period. Banks continued to provide, to a greater or lesser degree and with varying levels of usability, the same types of online banking services to customers—viewing account balances, statements and transactions, and making payments or transfers between accounts. Some banks allowed their customers to apply for and even open a savings account online, but significant change was largely absent.
But the long period of inertia may be coming to an end. We may be heading into a period of sustained change for digital banking. What has changed?
The instant availability of information on the web over high-speed connections, the massive adoption of social networks, and the parallel rise of smartphones and the mobile internet, has changed how we interact with content, institutions and one another.
Our behaviour as consumers is different as a result: we’re better informed, with high expectations of the digital services we receive; we’re faced with a vast array of choices, and we look to our peers to help decide which to choose; above all, social media has given us all a voice that can be amplified many times, if we hit the right chord with our fellow consumers.
Away from the consumer, the wide availability of low cost cloud computing has helped drive a new golden age for start-ups, who haven’t had to worry about investing the capital and skills needed to establish expensive IT infrastructure, allowing them to get to market more quickly and cheaply. Crowd-funding…