UK behind on online banking

The UK is an online banking laggard, with only a third of the population managing their finances through the channel, compared to two-thirds shopping online. And one reason for this is customers are happy with the branch and phone banking services available.

Although the number of consumers switching to online banking in the UK is growing, this growth is not as swift as other European countries.

silicon.com Financial Services

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A survey of banking behaviour from Forrester Research, entitled UK Online Banking Forecast: 2007 To 2012, investigated the perceptions of more than 4,000 UK consumers. It found they are dissuaded from using banking services online due to the good service in branch and on the phone.

The researchers forecast online banking will grow to around 22 million users by 2012, or 58 per cent of internet users.

According to Forrester principal analyst, Alyson Clarke, the strategy of offering branch, phone and ATM services for free is the biggest factor causing the slow uptake of online banking in the UK.

Clarke said: "There are no real disincentives to going into a branch, as there are in other countries, so customers aren't encouraged to go online."

She told silicon.com UK banks are missing out by not having a better online relationship with their customer bases. "Banks will have a better understanding of their customers if they are encouraged to bank online," she said. "This information can be used to better target offers to them. It also means customers will get a repeatable experience when their finances are processed, giving banks greater control over customer service."