Posted December 17, 2014 by Bex in All

How Online Banking has changed the way we bank.

With 1 in 4 global Internet users choosing to bank online it is clear that traditional high street banking is increasingly becoming a thing of the past. In an article recently published in the The Sunday Telegraph, chief executive of the British Bankers Association (BBA), Anthony Browne, comments that “branch numbers will continue to fall” and those fighting against these closures are “out of kilter with what millions of customers want”. The article also revealed that research conducted by the BBA has shown that 3 out of 4 Britons use either mobile or Internet banking every month.

Fotolia_18083243_STfnCWhere did it all start? Well, the original online banking service started back in 1981 and became more widespread throughout the 1990s, but in just that relatively short space of time, it has gone on to revolutionise the banking world.  Starting out as purely a means of accessing your account, it soon developed into allowing customers the ability to transfer funds at a much faster rate. Today, we have reached a point where consumers are pretty much in complete control of their financial transactions.  We can make payments, transfer funds between our own accounts and to other people, we can set up direct debits, pay bills and the list goes on and on.  Whilst that is great for us the consumer, it does mean that the traditional job role of the bank clerk is becoming more obsolete.

In a major new study, entitled “The Way We Bank Now”, the BBA have revealed a set of new statistics including HSBC’s spectacular feat of completing an online mortgage application in just 24 minutes. With most of the major banks seeing a 10{a7f143556510d926cb072b695f3ed49f89b7d13a9d4c359f2399f0d9de0c1da1} annual fall in transactions carried out in branch, it is no wonder that they are all trying to come up with new and innovative ways of interacting with their customers. Barclays has opened 8 small branches within Asda supermarkets, hoping to still cater for the elderly or computer illiterate and they are also in talks with WH Smith and Transport for London to investigate opening similar branches in select venues.

So, just why is online banking considered so popular amongst society today? First and foremost it has to surely be the advantage of being able to perform financial transactions 24 hours a day, every day including weekends and public holidays, a time when traditional banks would usually be closed.  Being able to stay on top of your financial affairs no matter where you are is also a huge advantage and has become the accepted norm amongst a generation who is growing up in our technologically advanced world.

One of the concerns of online banking is the increased risk of fraud and identity theft.  With so much personal information being shared through online banking transactions, financial institutions are continually fighting to stay ahead of the game with their security measures.  Fortunately for them, technology is evolving to account for this and they are so far winning the battle.

barclays-pingit-application-in-use-on-an-iphoneSo, what can we expect for the future of our banks? Will future generations even know what a high street bank is? And will we be even more in control of our money than we ever have been? The answer has surely got to be an irrefutable yes, but how long this will be is hard to know. Already, advancements in technology have seen the introduction of Google Wallet, an app which allows your smart phone to store your credit, debit, store and loyalty cards in one place and when you come to make a purchase, information can be transferred across by a mere tap of your screen. Services, such as Boku, allow consumers to pay for things online simply by using their mobile number. Charges are added to your phone bill and the theory behind it is that because people are generally able to remember their mobile phone, it means they don’t have to carry any other cards around with them. Similar to this, is the app from Barclays, Pingit, which also allows users to send money simply by using their mobile phone number.

Online banking is a dream come true to many financial institutions as it allows them to keep costs relatively low. With fewer branches comes less employees and overheads, meaning more money for them and hopefully some of those savings can be passed onto their customers. Without doubt, banking is a completely different affair today than it was 2o years ago. Fast forward another 20 years and no doubt the changes will be even more dramatic. But for the most part, it is proving both beneficial to the banks and to their customers, so for now everyone is happy.