In previous articles, we’ve talked about the implications that the EU 910/2014 standard and the Digital Single Market will bring to Europe. The DSM is possible thanks to the increased use of the Internet and is part of the strategic plan 2020. Today, we want to do research on Internet use in Europe, particularly in the level of confidence in the banking products.
Every day we see new companies offering new innovative services, by simplifying complex activities that we face in our daily lives. New ways to be more efficient at work, major fields of action at your leisure and new lifestyles are representing the millennials. All this has a common denominator: The Internet.
Only with the information provided by the European Union, we know that there were nearly 400 million Internet users in 2014. This means that 75% of the population of the countries of the Union have access to the network. Which increases to 81% when it comes to urban areas taking data from 2015 (Eurostat, 2015).
Internet use in Europe: An Overview
16% of this population has made purchases over the Internet in 2014, representing an increase of 60% over the previous year. European companies have also increased their number of purchases online, 22% compared to 2013.
These data are very relevant to the business of the European Union, as being more than 98% SMEs, the network is offering them a way to meet the needs of more than 400 million users. Proof of this is the growing fear of the British technology sector about the possible “Brexit”.
As well as for other organizations and users, there is now more than ever, a continental market that I can turn (both to buy and to sell) through the Internet and the DMS.
Following the influence of the habits of Millennials, today’s consumers have become always online. Therefore, companies must adapt their services to different platforms and channels that use the target audience. Europe has the highest penetration rate of mobile devices in the world (Twenga, 2015): 151% Central and Eastern Europe, and Western Europe 129%.
Countries where the number of transactions is the highest are Germany, Spain and France. In Spain the figure of 16 million euros was exceeded (ONTSI, 2015). In 2014 every European spend an average of 970 euros online.
According to the latest report of the Observatory Cetelem (2015) users claim that one of the reasons to purchase over the Internet is the security of transactions. In general, according to a study by MarkMonitor, 65% of users are concerned about secure electronic commerce. The Spaniards attach more value to security, the figure rises to 70%.
Internet use in Europe: level of confidence in Online Banking Products
The online banking products are rather widespread throughout Europe, reaching in some countries such as Denmark percentages above 88% of the population in 2014 (Eurostat, 2015). The most recent statistics available located in the EU-28 in a percentage that reaches 49% of the population continues to grow year after year. Although Spain only accounts for 30% of total transactions (Spotcap, 2015).
It is important to make a clarification, when it comes to online banking, we are referring both to access applications from the mobile and able to operate from them as to companies of banks that are entirely digital.
This trend roaming the banks are introducing new strategies of digitization. In fact, more and more banks choose to have subsidiaries 100% online. (ElEconomista, 2015)
Since the beginning of the recession to present the benefit of these entities it has increased more than 55, according to the Spanish Banking Association (AEB). (ElEconomista, 2015)
Mobile banking can thank the current turbulent economic environment growth and adoption by the part of customers, because, by 2010, some of the companies that now have benefits were in the red.
Moreover, according to Cinco Dias, in this environment it was reduced by 30% branch network and involved the disappearance of many financial groups. This was an advantage for ‘online’ banks, because they don’t have these large costs and could provide a faster and more efficient service to its customers.
The “online” companies are offering more standardized solutions exploiting economies of scale offered by the nature of the online business. In addition, they can afford to charge less conditions, lower mortgage spreads and more competitive compensation by not having to support a fixed structure such as the one with the traditional banking costs.
Although the “online” bank sector can offer a cheaper mortgages and more profitable than traditional banking deposits, in an environment of low interest rates the difference is minimal. (Cinco Dias, 2016)
In the last five years, el Popular-e (the online company of del Banco Popular) has increased his profits by 38, Allfunds seven, Inversis (company de Banca March) had an increase of 44%. On the other hand, Uno-e y Openbank have gotten out of losses by recording a positive result.
This article discussed the level of Internet use in Europe and later deepened the degree of trust of online banking products. As seen, it is extended by several factors, especially for the younger generation. The “online” banking has grown continuously since 2010, and only time will tell whether the actions carried out by traditional banks will be sufficient to make it a complementary solution.