What will be the face of consumer financial management in the future?
With more than 1,000 bank branches closing in the UK over the past two years, this points to a clear change in strategy from some of our largest financial institutions. According to the FT (1) this is in response to more and more customers turning to online and mobile forms of banking and the story is the same for investments too.
It is not just personal banking that more and more people are choosing to do through a computer or mobile device but management of their finances in general. After all, the mobile device offers an unrivalled flexibility versus the traditional bank branch.
According to consumer group Which? (2), HSBC has closed nearly 30% of its networks across the country, numbered at around 321 branches, whereas RBS and the Lloyds Banking Group shut 191 and 180 branches respectively.
Profits squeezed by record low interest rates, coupled with a change in consumer behaviour is building pressure on the UK’s largest financial institutions to modernise their offering – an area where newer and more modern financial institutions, such as Yielders, have already been driving change for over a year.
Research published towards the end of 2016 by Caci in a whitepaper (3) showed that mobile apps could boast over twice as many visits as bank branches could in 2015, with the number of branch visits steadily falling year on year, culminating in a drop to 268 million visits by 2020 versus 427m visits in 2015. On the other hand the management of finances via mobile is on track too more than double to 2.3bn in that time.
As UK consumers continue to move towards digital forms of financial management, traditional financial institutions such as the high street banks are looking for new partnerships to cut costs including collaborations with G4S and the Post Office – offering people an alternative bricks and mortar option for the management of their finances.
However, this is touted as a medium-term option for the generations who are still not confident in using digital financial management options rather than the future face of consumer financial management (3).
Peter Vicary-Smith, chief executive officer of Which?, said: “Access to the services necessary to make everyday banking possible should be simple and straightforward.” Banks “can and must do a better job” of working with their customers to understand their needs, he added, especially when they were making changes to their services or closing branches.
The rise of the fintech industry in the UK in particular has acted as a catalyst for this change in consumer behaviour, allowing new financial firms to enter the financial marketplace where traditionally there have always been high barriers to entry.
In a few simple steps you can transfer money from your bank debit or credit card, into an online and secure E-wallet, from there the possibilities are vast.
Using our own platform as an example: With as little as £100 you can invest in a range of UK property investment products – each with their own predicted yields that far outstrip the traditional investment products offered by retail banks – such as cash ISAs.