By 2020 42 million UK consumers will use the Internet for banking as well as for searching out new deals, which could result in up to 11 million customers moving away from the Big Four banks which currently dominate the current account market, according to research from UK bank Alliance & Leicester.
A&L says eight out of 10 people will use online banking by 2020 when near universal Internet access will make Web banking services as easy to access as any TV channel.
This will lead to a better understanding of financial information which, coupled with rising wages and savings, could result in customers switching accounts and leaving the Big Four banks which currently dominate the market.
According to A&L's Banking Revolution report, currently fewer than two per cent of customers switch current accounts a year – with seven per cent saying they are planning to do so in the next 12 months. But By 2020 more than five times as many customers will be willing to switch current accounts – with four in 10 people being prepared to change banks.
Chris Rhodes, MD of the retail bank at Alliance & Leicester, says so far the Big Four banks have benefited from consumer apathy and large branch networks.
He says customers will be less prepared to put up with poor deals and will be able to search out better offers using the Internet.
"Against this backdrop, the cost of supporting a large branch network will become a hindrance rather than an advantage as it makes it more difficult for larger banks to offer better value products. The result could be a significant exodus from uncompetitive providers," says Rhodes.