UK Consumers demand improved smartphone banking apps

Major new study into the mobile banking apps of the UK’s five leading banks

• Most banking apps have limited functionality
• In a major new study, none of the major banks scored more than 75% on functionality or usability
• The lowest scoring app – from HSBC – was rated just 32%
• Banking apps overall score ranking[1]:
• • #1: Barclays 73%
  • #2: Lloyds 65%
  • #3: Natwest 61%
  • #4: Santander 42%
  • #5: HSBC 32%
• One in four people who don’t use banking apps are put off by the lack of functionality
• Nearly one in five people are concerned about security

Although nearly half of UK consumers (43%) use a smartphone banking app, and more than a third (34%) are using an app at least one a week, new research shows that, of the generation of mobile apps currently available from five leading UK banks, there is considerable room for improvement.

New research into the smartphone banking apps of Barclays, HSBC, Lloyds, NatWest and Santander, conducted by digital innovation agency Adaptive Lab, found that banks will have to improve their apps if consumers are going to be able to manage their finances entirely from their smartphones.

Kat Matfield is service design and product manager at Adaptive Lab and led the research. She said:

“Overall, the generation of mobile apps currently available from these five leading UK banks leaves considerable room for improvement. If consumers are going to be able to manage and monitor their finances entirely from their smartphones, banks will have to make more functionality available on their apps and focus on improving the user experience. If they fail, consumers will start switching to banks that will. Already 1 in 5 people say that getting access to a better banking app is one of the reasons they’d switch banks.”

The survey found that nearly two thirds (64%) of consumers would like to be able to see pending/upcoming payments, and more than half (52%) would like to add new payees via their banking app. However, only one of the five apps reviewed in the study allows users to add new payees and pay them through their account number and sort code.

Kat Matfield continued, “2014 was a turning point in consumer behaviour, with smartphones overtaking laptops and desktops as the UK’s preferred tool for going online. Our research showed that 34% of UK consumers use a smartphone banking app at least once a week, and 17% at least once a day. Many industries have been impacted by this shift and consumer banking has been no exception: people are increasingly using smartphones as a key or, sometimes, only banking touchpoint.”

In 2014, Adaptive Lab identified a gap in current understandings of both the functionality and the user experience of smartphone banking apps. Utilising its expertise in the sector, the company undertook extensive research in order to provide a compelling detailed assessment of the quality of the smartphone banking apps.

Key findings of the research include:

Usage of banking apps has surged:
The quantitative research showed that more than 4 in 10 (43%) UK consumers use banking apps, and 34% use them at least once per week.

19% of consumers would like to utilise their smartphones as their ONLY banking touchpoint. These figure increases to 30% among 14-16 year olds.

Of the consumers using mobile banking apps, 39% check them daily, compared to daily usage for banking websites which was only 27%.

Functionality & Usability:

None of the banking apps scored more than 75% on either functionality (how many banking tasks people can do with the apps) or usability (how fast, easy and pleasant the app is to use and to understand).

The lowest scoring app rated just 32% overall, breaking down into 43% for functionality and 25% usability.

Choice driven by the lack of functionality as well as security:
The qualitative research enabled Adaptive Lab to gain insights into the fact that 25% of the consumers who don’t use banking apps are put off by the lack of functionality, whereas only 18% are concerned about security.

The lack of functionality highly influences consumers’ choice in deciding to utilise banking apps.

Extra features:
The survey found that nearly two thirds (64%) of consumers would like to be able to see pending/upcoming payments,

Over half (52%) would like to add new payees via their banking app, however currently only 1 of the 5 apps reviewed in the study allows users to add new payees and pay them through their account number and sort code. All apps reviewed offer the ability to pay someone via their mobile phone number, except Barclays, which offers this in a separate app. However, this payment process requires both parties to register before payments, unlike traditional payments to an account number and sort code.

The report also sheds light on consumers’ expectations in terms of user experiences and responses towards the different functionalities of smartphone apps. The full research report offers considerable additional insight, including:

• Detailed findings on each of the five apps reviewed, accompanied by screenshots
• Strategic and tactical recommendations for app excellence in the near and longer term, applicable to all retail banks
• Deep insight into how consumers use banking apps and what they value most.

Kat Matfield said:

“At the moment, many banks treat their apps as a supplement to online banking, and offer only a subset of the functionality offered by their website. Although there are aspects of the apps that were reviewed that are visually attractive and user-friendly, most of these banking apps are to a certain extent limited in feature-sets and in providing a positive user experience.”

She concluded:

“Banks are already aware of the pivotal role apps can play in migrating customers to more cost-effective service channels, increasing retention and customer acquisition – but to fully realise these benefits banks will have to offer the stand-out user experience their customers have come to expect from apps.”

James Haycock, managing director at Adaptive Lab, commented:

“Extensive research and work has been undertaken at Adaptive Lab to achieve this study. It is a combination of primary and secondary research; with that of qualitative and quantitative research from a survey of over 400 nationally representative UK consumers, an expert heuristic review, user interviews and observations, and analysis of thousands of app store reviews from the iOS app store and Google Play.”

To download a summary of the report for free visit here.