UK banks in the midst of online revolution says A&L
11 October 2004 | 3447 views | 0
Consumer acceptance of remote, direct banking methods for day to day transactions is set to accelerate, according to a new report, 'Banking 2020: Future Trends', commissioned by Alliance & Leicester.
Driven by time-pressured lives, a greater openness to change and an increasing demand for convenience, the report forecasts that by 2020, 42 million adults (80%) will be using Internet banking, four times higher than today’s levels. Further, virtually all customers, 95%, will be using either the telephone or the Internet to contact their banks.
In 2020, the branch will still play an important role, with 58% of customers projected to be using a mix of channels. Today, seventy-four per cent of consumers say they still want to be able to visit a branch for face to face discussion of more complex matters.
Currently, seven per cent of people use only direct channels, but by 2020 this number will have increased to 12%. Conversely the proportion of people who use branches for all of their transactions, 15%, is set to fall to 5%.
Richard Pym, chief executive of Alliance & Leicester, says the change in consumer behaviour is leading to some complex strategic choices for banks.
He says: "Large branch networks will become less important in gaining market share – and at the same time the cost of supporting a large branch network will make it more difficult for larger banks to offer the better value products which customers increasingly expect."