Mobile makeover for Britain’s scandal-hit banks

LONDON: With reputations tarnished by the financial crisis and a string of scandals, Britain’s top banks are trying to adapt and move ahead by embracing mobile technology.

Four years ago, Lloyds Banking Group did not have a single customer accessing services via a smartphone, but today there are five million using such apps – and counting.

“Th i s prov ide s hug e opportunities for how we serve our customers,” said Nick Williams, consumer digital director at Lloyds.

The trend is echoed across the industry. In 2015, Britain’s banking industry body BBA expects 427 mi l l ion branch transactions for the whole sector, compared to 895 million transactions on mobile phones.

British consumers are now among the top users of banking smartphone applications in developed nations.

“UK consumers were relatively slow in their adoption of online banking but have embraced mobi le banking thanks to the ease and convenience of managing your money on the move,” said Phi l ip Benton, an analyst at Euromonitor International.

“It’s understandable that the UK retail banking sector is betting on these new technologies.”

A recent Euromonitor survey found 36 per cent of British consumers have used a smartphone to access banking services in the past month.

That compares with 44 per cent in the United States, 39 per cent in Australia, 32 per cent in France and 19 per cent in Germany and Japan.

“It’s an important evolution of the relation between banks and their customers. This could be the future of retail banking,” BBA spokesman Robert Watts told AFP.

The financial crisis, scandals over rigging the interbank and foreign exchange markets and consumer challenges of missold financial products have undermined trust in Britain’s top banks – and hit their balance sheets.

Lloyds and other lenders have spent about 26 billion pounds (37 billion euros, US$ 41 billion) alone on compensation for having wrongly sold Payment Protection Insurance ( PPI).

The four main banks – Barclays, HSBC, Lloyds and RBS – still dominate the market, holding about three quarters of all current accounts in 2014, according to the Competition and Markets Authority.

But their hold is being challenged by foreign rivals, notably the Spanish banking group Santander, and newer establishments such as Metro Bank, Tesco Bank, Virgin Money or upstarts like Atom and Fidor.

Some of these newer rivals have been quick to use mobile technology to win over customers, notably young people accustomed to shopping and buying music on their phones – forcing the big lenders to innovate.

Mobi le banking of fers flexibility for users as well as a new market for products that analyse their spending to help them manage their finances, with no need for expensive branches. — AFP