FinTech continues to grow in the face of High Street Banking Closures
- Brits log into banking apps over 11 million times a day
- £2.9 billion is transferred using online banking per week in the UK
- RBS seen a 43% drop on in-branch transactions
- In Branch Transactions down 6% since 2014
- Rural areas to suffer from closures
Following the news that Lloyds Banking Group will close more than 200 branches, with 3000 workers set to lose their jobs, the future for high street banking looks ominous.
The company blamed Brexit uncertainty on the job losses, but the bank has been steadily slimming down their workforce as far back as 2014 as part of an efficiency drive to save £400 million. So far the total number of job losses stands at just over 12,000.
Rival banks have also been cutting their workforce in the wake of increased online banking and diminishing transactions within branches.
In the past year, 600 branches across Britain have shut their doors, with a grand total of 3,000 within the past decade. Bank branches are expensive to staff and maintain, and with around a third of customers using online and mobile banking services (and growing), there is a decreasing need for Banks to have a presence on the high street.
Research from BBA provides supporting evidence. They found that Britons typically log into banking apps over 11 million times a day (a rise of 50% on the past year) and transfer £2.9 Billion a week.
This relatively new behaviour can be attributed to the decline in branch transactions – down 6% since 2014.
For some the situation is more extreme. The Royal Bank of Scotland has lamented a drop of 43% in transactions made within branches, along with HSBC recording only 2% of customers visiting branches to transfer funds.
Commenting on this new age of online and mobile banking, Daumantas Dvilinskas, the CEO of Financial Technology (FinTech) innovator TransferGo noted, “The future is convenience. People want and expect instant results and Banks are merely reacting to this new behaviour. In the last week alone we have seen an increase of 10% in user registrations, with $17 million USD transferred last month, meaning there is very strong demand for online and mobile financial transaction systems.”
FinTech firms are indeed thriving in the new age of mobile banking and it is not just due to convenience. With traditional banks notorious for adding on hidden charges and high transaction costs (the UK average is £10.00), digital remittance applications like that of TransferGo are a far cheaper option with fixed transaction costs of just 99p.
Of course it is highly unlikely that every high street Branch will shut its doors - city centres still remain economically viable due to customers preferring face to face contact for more complex transfers such as mortgage applications.
But for those in remote areas where keeping branches open isn’t as viable and where internet connectivity speeds are poor, the near future of banking does not look particularly convenient.
Notes to Editors:
TransferGo is a digital remittance solution aimed primarily towards migrant workers. Payments are transferred on a digital account- to-account model so no money ever leaves the country. This means funds are sent and received instantly and there are no hidden charges.
With a fixed transfer fee of 99p, they are a far cheaper option than Banks, whose average transfer fee is £10.00.
All data and statistics used were correct as of the 29th July 2016.
For more information please contact Dominic at Dominic.firstname.lastname@example.org or 0113 234 3300
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