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Mobile banking takes off in UK

News, 23 February 2015

LONDON: The extent to which British consumers are embracing the burgeoning mobile payments market has been reinforced by a recent survey which shows that almost half (43%) now use a smartphone banking app.

Just over a third (34%) use a banking app at least once a week, and 17% at least once a day, while almost a fifth (19%) would like to use their smartphone as their only banking touchpoint.

These are key findings from a survey conducted by Adaptive Lab, the digital innovation agency, which questioned more than 400 adults about their experience of the smartphone banking apps offered by five of the UK's leading banks.

As reported by Mobile Industry Review, the research confirmed that UK banks "have come a long way" in terms of embracing mobile banking but that they need to do more to overcome limitations in "functionality" and "usability".

None of the banking apps scored more than 75% on either measure – functionality being defined as how many banking tasks can be done with the apps, and usability as "how fast, easy and pleasant the app is to use and to understand".

This matters, the report said, because consumers are strongly influenced by the functionality of smartphone banking apps.

Inadequate functionality deters 25% of consumers who don't currently use banking apps from adopting them. By comparison, concerns about security puts off just 18%.

Kat Matfield, service design and product manager at Adaptive Lab, said the UK's leading banks – Barclays, HSBC, Lloyds, NatWest and Santander – had "considerable room for improvement".

"If consumers are going to be able to manage and monitor their finances entirely from their smartphones, banks will have to make more functionality available on their apps and focus on improving the user experience," she said.

For example, over half (52%) of consumers would like to add new payees via their banking app yet only 20% of the apps reviewed offer that function.

With the study confirming the popularity of mobile payments in the UK, a separate development in the US may help to accelerate the trend there.

Samsung, the Korean technology giant, last week acquired US mobile wallet startup LoopPay in a move that analysts see as a challenge to Apple Pay, the iPhone mobile payments system that Apple launched in late 2014.

LoopPay's smart technology allows retailers to use their existing magnetic-stripe readers to change into contactless payment receivers.

Data sourced from Mobile Industry Review, Reuters; additional content by Warc staff