Online banking following retail's digital path

Internet and mobile banking is now used for transactions worth £6.4 billion a week – up from £5.8 billion last year – according to research published by banking trade association BBA and professional services firm Ernst & Young (EY).

Banking apps for mobiles and tablets have now reportedly been downloaded more than 14.7 million times, which represents a 2.3 million rise since January and is equivalent to a rate of around 15,000 per day in 2014. Internet banking services typically receive seven million log-ins a day, too, as consumers increasingly conduct their personal finance affairs in the digital world.

Another finding, which will directly impact the retail industry, suggests that spending on contactless cards is expected to rise to £6.1 million a week this year – up from £3.2 million in 2013.

Numerous retail indices and individual retailer trading results highlight how online sales are growing as a percentage of the overall UK retail market – that is no longer a surprise – but e-tail trade association IMRG's latest eCommerce report, conducted in association with Capgemini, indicates that it is increasing at a faster-than-expected rate.

Online sales were reportedly up 17% year-on-year in May, with an estimated £8.2 billion spent online during the month. The average online shopping basket in May reached £88, which was the highest for two years and would suggest growing consumer confidence in buying goods via the internet.

The UK is viewed as a global leader in online retailing, and it appears that the banking industry also has an opportunity to establish itself as an international trendsetter in the digital space.

Tariq Khatri, an EY partner in the company's digital financial services, commented: "Digital banking is really shaking up the market, driving competition and innovation.

"This is great news for consumers and also potentially for the UK economy. The British public's adoption of digital banking has reached critical mass this year and we believe the UK has a unique opportunity to achieve a leading position in digital banking."

Reflecting what many retailers have been saying for sometime now about the emergence of the empowered customer, who will dictate when and where they choose to shop, BBA CEO Anthony Browne added: "This study shows that banks have, are and will continue to compete against one another to offer customers innovative technology to win your custom.

"It's a revolution putting more power in your hands."

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Ernst & Young