Fintech analysts Juniper Research reveals that over 2 billion mobile users from all over the world will have used their devices for banking purposes by the end of 2021, compared to 1.2 billion this year.
The new research, Retail Banking: Digital Transformation & Disruptor Opportunities 2016-2021, found that the number of mobile banking logins are now exceeding that of internet banking logins in many markets.
According to the BBA, banking app logins in the UK reached a record 11 million per day during 2015, compared to 4.3 million internet banking logins during the same period. Juniper Research revealed a similar trend in a recent consumer survey; around 65 per cent of mobile banking customers in the US and the UK use an app to conduct banking services.
The report found that banks are becoming increasingly concerned that their market position is being undermined by tech-companies and pure-play vendors enabled by technology and regulations to enter the marketplace.
In the UK alone, five new digital banks received licences or launched services so far in 2016, including Starling, Tandem, Atom, N26, and Monzo, with around 20 banks waiting in the wings for their licence.
Additionally, by 2017, banks in the EU will be compelled to open their APIs. This will result in many innovative new products that analyse user data to create more attractive financial services for customers.
“Recent industry shifts highlight why traditional banks must respond rapidly to retain market share by cultivating new revenue channels and enhancing existing base through sustained innovation.
However the challenge here for new players is to increase market share and maintain profitability in the long-run,” added research author Nitin Bhas.
Meanwhile, traditional banks like Lloyds have been aggressively investing in its digital strategy, while coming under fire for nation-wide branch closures. To stay competitive, Lloyds Banking Group is introducing virtual reality technology to assess its graduates for its 2017 trainee programme.
This industry first will simulate situations to candidates beyond what is possible in conventional assessments.
The idea is to find the most digitally savvy talent to keep banks competitive in an increasingly competitive, digitally astute market, traditionally ruled by fintech mavericks.