Digital banking transactions in the UK have reached nearly £1bn a day, according to a new report, which also notes sharply declining branch use.
Internet and mobile banking is now used for transactions worth £6.4bn a week in Britain, up from £5.8bn last year, the report from the British Bankers Association and accountancy firm EY says.
In response, banks are expected to close unprofitable branches while they invest in mobile and online services. Banking apps for mobile devices have been downloaded more than 14.7 million times – up 2.3 million just since January – while Internet banking services are typically receiving 7 million log-ins each day.
The report also forecast spending on contactless cards would rise to £6.1m a week this year from £3.2m in 2013.
Tariq Khatri, EY partner for digital financial services, said: "Digital banking is really shaking up the market, driving competition and innovation. This is great news for consumers and also potentially for the UK economy.
"The British public's adoption of digital banking has reached critical mass this year and we believe the UK has a unique opportunity to achieve a leading position in digital banking."
Royal Bank of Scotland said last month it was inevitable that it would close more of its 1,900 branches after branch transactions fell by 30 per cent over the past 3 years. Barclays, Lloyds and HSBC are also expected to close branches, according to industry sources.
The Campaign for Community Banking Services, a lobby group, has warned that further closures could have a damaging impact on smaller rural communities that rely on local branches for their banking services and called for measures such as branch sharing to avoid those which are the last left in a particular area being shut down.
But the BBA said branches would remain integral to banking in the 21st century. It said 2,274 bank branches had been refurbished in the past two years, underlining banks' commitment to their high street outlets.
"Day-to-day branch use is falling sharply and while the size of these networks will decline, high street outlets will remain important for those bigger moments, such as when a customer takes out a mortgage, wants to assess their financial options or resolve a complaint," the report said.