Mobile banking is set to overtake branch use in the next two years, as a boom in the fintech sector drives an increasing number of customers to digital formats.
Research by data consultancy CACI revealed 25m customers, or almost half the UK’s adult population, are currently banking on mobile formats.
But this figure is set to rise further in the coming years, with mobile expected to surge past branches and desktop banking to become the most commonly-used banking channel for the majority of UK adults by 2021.
The findings highlight the growing popularity of digital banking, which has been pioneered by fintech challengers such as Monzo, Revolut and Starling.
Mobile savings accounts are set to become the latest battleground in the war between traditional banks and their younger rivals, according to the report, with more than 75 per cent of new savings accounts expected to come from online channels by 2024.
However, the data showed digital formats are supplementing the use of branches, rather than replacing it.
While the proportion of customers using mobile banking apps will reach 71 per cent by 2024, the number of branch users will suffer only a gradual decline to 55 per cent from 65 per cent three years ago.
“While digital – and mobile in particular – is clearly a front-runner for the future of banking, there is a huge potential for financial institutions to tap into unexplored markets such as younger customers, who have current accounts but aren’t necessarily saving yet,” said Jamie Morawiec, CACI associate partner and report author.
“The increase in popularity of peer-to-peer lending, alongside the rise of the challenger banks, will change the landscape for traditional banks. To stay tapped into the savings cross-sell, banks must offer a seamless, tech-driven user experience.”