The way that we bank has changed enormously in a relatively short period of time. Almost 30 years passed between the introduction of the first ATM in 1967 and Wells Fargo becoming the first bank to go online in 1995. However, since then the rate of change has been dizzying, with more changes sure to on the way in the shape of mobile banking advances.
More Mobile-Only Banks
The appearance of mobile-only banks like Monzo and Starling has represented a genuine revolution in the industry. These are operations that only operate online, with no physical branches for you to visit. They have been spectacularly successful, with Revolut picking up 12 million customers and Monzo having close to five million customers at the end of 2020.
One of the reasons people like these banks is that there is less paperwork, so it is easier to open an account and carry out transactions. For instance, someone who is unable to open a conventional bank account in the UK High Street due to a lack of paperwork may do so online just by filling in their details and sharing a photo of themselves. In fact, Monese was set up in 2015 for exactly this reason, as founder Norris Koppel moved to the UK and then realised that he couldn’t set up a bank account.
The huge appeal of mobile banking means that it is sure to carry on growing. Yet, there are some issues to resolve before it becomes an option for everyone. Security is a concern for some people, with many mobile banks introducing biometric security and single-phone access to enhance this area. It is also important to see how much of your money is fully protected, as not all of these companies are covered by the Financial Services Compensation Scheme, which gives account-holders protection of up to £85,000.
The Growing Importance of Artificial Intelligence
Artificial intelligence (AI) has become very important in many industries lately. In terms of mobile banking, we can see how apps like Plum and Chip use AI to help their customers to save money. Their technology identifies the user’s spending habits and looks for ways to help them to put more money away each month. This should make it easier to budget for carrying out work at home or for a holiday. In some cases, you can even set up different savings pots for various reasons.
One of the major issues some people have with mobile banking is the level of customer service. Some reports suggest that it can be difficult to get hold of an agent when needed. The use of AI chatbots should solve this problem, as they will eventually be capable of helping out callers just as well – if not better- than a human agent could, without any delays.
How the Blockchain Could Make a Difference
The blockchain has been brought into mobile banking, just as it has disrupted virtually every industry in the last few years. It is easy to see how it could help mobile banking progress, as it provides a decentralised approach where every transaction is validated transparently. It is becoming particularly popular for international transfer, thanks to cryptocurrencies like Ripple.
Revolut already offers cryptocurrencies for sale, and it seems likely that we see closer links between mobile banking and the blockchain over time. In theory, it should become even easier for you to verify your identity, open an account and move money across the world in this way. The world’s biggest banks have all invested a lot of money into investigating the blockchain, so it will be fascinating to see whether they manage to fight back against the slicker, leaner operations of the mobile-only banks.
What Industries Are Benefitting from New Banking Methods?
Every time that the banking industry changes in some way, it affects numerous industries as well as their everyday personal customers. A good example is the rise of online banking, which led to the e-wallet industry being created, giving PayPal, Skrill and other companies the chance to offer far more flexibility to their customers.
We can also see changes in the investment industry. The Top Online Forex Brokers site confirms that the likes of eToro, FXTM and AvaTrade all operate online. A variety of trading platforms can be accessed online, with Bitcoin, Skrill and Neteller among the options available for moving money in and out of different currency pairs. This flexibility and accessibility have opened up the investment industry to far more people, who can learn everything they need to know on the internet. This site even provides reviews for those wanting to learn more.
Modern banking methods have also given retail sites a huge boost. In 2020, the online retail market in the UK reached close to £100 billion. The emergence of online and mobile banking has played a large part in this surge, as it is now far easier for anyone to pay for goods on the internet. As mentioned earlier, mobile-only banks are available to people who might not be able to open traditional accounts, meaning that they get a card they can start using for online purchases.
At the moment, it is impossible to tell what other knock-on effects the rise in mobile banking could have, but it seems certain that the way we can move our money more freely around the globe will lead to benefits in other areas of life too.