The race to manage your money is on… the smarter the better

By Mark O’Keefe, Founding Dir, Optima Consultancy

Last June, at Money20/20, we published our inaugural “Mobile Banking App Review”, a comprehensive benchmark of UK mobile banking and finance apps. Mobile banking has been growing exponentially with the latest statistics from UK Finance showing 41% of adults are using their mobile for banking services and a further study by Ofcom found 84% of all adults agreed online banking has made their lives easier. Furthermore, with the implementation of PSD2 on 13th January, open banking is finally gaining momentum and we are starting to see providers introducing new account information services for users, most of these neatly packaged in the mobile app.

Accordingly, the goal of the study is to monitor and demonstrate banks and other financial institutions are focused on giving the consumer the best app experience possible. With the rapid changes that the market is undergoing, we have been following the market closely since the summer and have published an updated report, here is a breakdown of the main changes since last publication.

Intelligence is becoming the new ‘secret sauce’ 

Like a formula one race, there are a lot of ingredients that shape the winning team. Our updated review highlights how the inclusion of smart money management capabilities within a banking app are fast becoming a customer expectation and banks are investing to ensure they cater for this customer need. The inclusion of Money management features such as real-time balances and budgeting tools, as well as in-app chat and marketplace functionality that enables users to take advantage of a larger financial ecosystem are becoming the norm.

This is where the digital prowess of the fintechs is the most visible, with an average of 9 money management features versus 4 features for incumbents. This is a big gap and if not filled imminently, it is highly likely it will be the Account Information Service Providers (AISP) plugging the gaps for their customers, aided by open banking. Furthermore, as more and more AISPs offer payment initiation services, there will become less need for customers to log in to their primary banking apps which could spell the end of the road for the relationship between current account provider and customer.

To be good you have got to be fast

App updates, speed and performance have quickly made the transition from being a ‘nice-to-have’ to a ‘need-to-have’. Raised customer expectations have meant app providers have had to rethink development cycles; app providers are releasing on average 51% more updates than in 2017. Fintechs dominate the top performing 25% with more than 26 updates a year, whilst incumbents saturate the bottom with less than 10 app updates a year.

There is still a 42% gap between incumbents and bank challengers when it comes to app functionality. Since the previous study, HSBC and Barclays finally added Android biometrics, Lloyds and Halifax added transaction controls and NatWest and RBS have added live chat. It is hard to keep pace however, because the challengers are moving even quicker, Revolut adding budgets and Monzo added Apple Pay to its suite of payment functionality amongst others.

Blow-outs galore: Legacies are showing the strain

In the past six months, Barclays, TSB, HSBC and RBS and NatWest have had outages and system issues impacting their mobile banking apps, which may indicate that legacy systems are becoming more of a problem. It is questionable whether these can be resolved without a full core banking platform migration. Understandably, after TSB’s migration woes, incumbents are unlikely to follow suit and we see many look to start-up a digital only brand as an alternative technical strategy.

A photo finish!

Banking apps are getting more intelligent, providing the user with insight and projections to help them better manage their money. This is where Monzo really excel and as a result they have been crowned the best banking app. In October, they released a blog post detailing an array of new features and functionality to come and making money management easier and more flexible for customers is high up on their priority list.

Revolut have been similarly transparent, stating that Apple Pay and Google Pay are on their way. Currently in third place, if Revolut continue their current speed of deployment of new features, they are certainly one of the favourites on the starting grid for next year. B may also pose a threat, particularly as going forward they will have the Virgin Money brand behind them and N26 have finally started their UK rollout this month. Barclays, meanwhile, the strongest incumbent in fourth place and starting to implement open-banking in their main app, suggests the trusted players aren’t out of the race yet. It’s a tumultuous journey with a lot to play for.

For more details and to download the full report visit

This article was provided by [Optima Consultancy (UK) Limited]. 

These articles, materials, quotes, research and recommendations are not the views of Visa Inc, and are provided “AS IS” and intended for informational purposes only. They should not be relied upon for operational, marketing, legal, technical, tax, financial or other advice. Visa Inc. neither makes any warranty or representation as to the completeness or accuracy of the information within this document, nor assumes any liability or responsibility that may result from reliance on such information. The Information contained herein is not intended as investment or legal advice, and readers are encouraged to seek the advice of a competent professional where such advice is required.

Tag: Mobile payments