Perhaps the UK should look to the US for inspiration, say experts. Nick Hungerford, founder of online discretionary manager Nutmeg.com, says Square.com, a mobile payment system, is shaking up banks in the US by allowing people to pay for things using their phones. Then there is USAA, which caters exclusively to US military staff and their families. It has developed a mobile app that allows soldiers on the front line to pay cheques in by photographing them.
This is not to say, however, that the branchless model will dominate the UK retail banking landscape any time soon. “There is a strong belief among some older customers that bricks and mortar provides stability,” says King. “This attitude is thought to linger from the Great Depression – if something goes wrong, people want to know there is somewhere they can go and yell at someone.”
But he adds that the use of bank branches is decreasing fast and that banks need to adapt. “In 1995, the average Briton would visit a branch twice a week, but by 2016 mobile will be the primary way in which people interact with their bank. Branch use will be down to just one or two times per year,” he explains.
This does not mean that banking will become fully automated, though. Human contact is still important – but it does not need to be with a human being sitting behind a counter in a branch, says David Conway, strategy director at Nunwood market research agency, and the founder of internet-based bank Smile (part of the Co-operative)“More people are doing the basics of banking online or on their mobile,” he says. “But when people go into a branch it is because they feel their problem is too complicated to solve online. The bank of the future should be trying to push knowledge into the digital channels – in the form of online and phone assistants – so that people can get the information they need without going into a branch.”
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