Mobile banking has changed the way we manage our money and save us billions in the Bank, startups say.
Charlie Kingston, a 22-year-old software engineer based in London, banks with mobile-only rookie Starling Bank.
“I joined the “mobile Bank” to get control of their money,” he says. “In-app” pulse ” gives me a quick and informative overview of how I spend and real-time alerts really helps me keep on top of things.“
International money transfer service azimo said that Europeans could save up to $ 7 billion a year in financial fees for mobile banking applications, helping them to more quickly switch money and avoid overdraft fees.
Two-thirds of British consumers say they have avoided up to $ 100 in debt or fees by using technology to manage your money.
Instant access to balances also helps us to keep an eye on our costs, says azimo, which polled 4,000 people across France, Germany, Spain and the UK.
Carl Riordan, 36, another Starling Bank customer, said that he didn’t realize how easy it would be. “When I first thought of a Bank with no branches, I didn’t know that it only takes a few clicks,” he says.
Global banking giant HSBC says that more than 90% of their customer interactions are now through digital channels.
That’s why more than 1,000 local chapters in the UK were closed over the past two years, more than 400 is expected in 2017.
Of course, mobile banking is nothing new in Africa, with service as “M-Dog” recently celebrated its 10th anniversary. The mobile payments service launched by Vodafone mobile operator safaricom in 2007, now has about 25 million users in 10 countries.
But the reason why mobile banking has been so successful in Africa, which have been traditional banking institutions inaccessible to most people. It was mobile or nothing.
In Europe, Asia and the USA, it is convenience of smartphone technology that’s driving huge changes in our behavior Bank.
“Now, FINTECH [financial technology] companies can obtain licenses to conduct banking activities and to compete on equal terms, technological innovations in mobile to make this possible,” says Megan Caywood, Director of platform at Starling Bank.
The younger generation in particular now trust the security of smartphones, with their ability to handle various methods of biometric authentication, whether it be fingerprints, voice, image and video recognition.
Fintech startups make the most of a more relaxed financial regulation in the European Union (EU), which in 2018 will also see the banks are forced to communicate with client, because clients give their permission.
This will allow digital banking platforms to position themselves between banks and customers and offer a full money management service by combining products from different vendors.
New mobile banks, such as the atom, Monzo, Starling, Tandem and n26 are specifically designed for young customers and to connect with other app-based service providers.
For example, in Germany, with n26, which operates in 17 countries of the European Union and has about 300 000 members, offers in-app Marketplace that gives customers access to other providers of financial technology such as transferwise international money transfers.
Starling Bank is also working with transferwise.
Another German start-up SolarisBank, which recently raised 26.3 m euros (£23.1 million) from investors, has developed a platform that any company can plug in and instantly offer financial services, from peer-to-peer payments gift cards.
“The main idea of the Bank as a platform for innovation in the financial and banking space,” says Marco Wenthin, SolarisBank co-founder.
“It offers banking services as the building blocks for fintechs, digital companies and banks that want to deliver the experience modern customers demand”.
David Brear, founder of the consulting 11FS FINTECH, said: “If in five years [the banks] not only sells its Products through its own channels to only their clients they are in hard times.”
The more enlightened traditional banks understand this and cooperate with startups or encouraging their development in high-tech incubators.
“The processing industry is not always about the failure of the employees; cooperation is equally important,” says Erez Mathan, chief operating office GoCardless, a company building a global inter-Bank payment network.
“Through partnerships with major financial institutions, businesses in the Eurozone may have periodic payments without high fees and piles of paperwork.”
Another technology is beginning to have a significant impact on innovation in the financial services sector is the blockchain, a secure digital Ledger that records and verifies transactions without the need for a centralized database.
Circle, a peer-to-peer payments firm that uses the blockchain to send money as easy as sending a text.
“When we created the circle, a large part of which is a long-term bet on the blockchain technology and digital currency, we thought that the opportunity to provide the missing layers required to open a value exchange,” says Sean Neville, circle President and co-founder.
But all these innovations are only going to persuade us to go to the mobile version if it makes our lives easier and cheaper.
And as it turns out, mobile banking is doing just that.
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