80% use Internet to do their banking against 20% going to local branch
The subject of how expats in Spain do their banking is one which will be popular with many expats because Spain is still one of the most popular destinations especially for those from the United Kingdom. We asked the general question “How do expats do their banking overseas” and while we will be looking at the overall results we have also split this down into the more popular expat destinations.
Willing to throw light upon this matter, Expat Forum has conducted a research in conjunction with Barclays International Banking to find out how expats in Spain do their banking. Main findings are as follows:
Online banking (80.00%)
Online banking captured 80% of the vote from expats in Spain which is slightly higher than the 70.39% for the overall poll. We can therefore assume that online banking is very popular in Spain and we can also assume that the networks and the services required are available in abundance, but are they? Is it also fair to assume that because the vast majority of Spanish expats are likely to be from the UK they will be used to online banking which is fairly widespread across the country?
On the subject of services and networks it is worth pointing out that the various Spanish broadband providers have been reined in by the government with suggestions of anti-competitive behaviour. Indeed it was suggested that some Spanish broadband providers were charging in excess of 20% above the European average due to a perceived lack of competition. Fines were introduced to those who were found guilty and thankfully it seems as though the market will become more competitive in the short, medium and longer term and changes are afoot.
While online banking has been available in Spain for some time via both domestic and international banking corporations there has been some concern in years gone by regarding the reliability and the cost of Internet connectivity. Thankfully this issue is now under scrutiny and we can fully expect a reduction in broadband pricing across-the-board, improvements in network reach, improvements in reliability and faster speeds. These will all play into the hands of the online banking corporations and indeed more and more customers will take a closer look at online banking as reliability issues are also addressed.
Despite the relative negative comments regarding broadband connectivity in Spain and the cost of such services it seems online banking is still more popular amongst expats in Spain compared to the overall poll. What could we expect this figure to be if broadband services were much improved? In the meantime, it pays off to take a look at the free demo on online banking services available at www.barclayswealth.com.
Mobile banking (0.00%)
In this instance we will assume mobile banking to incorporate mobile telephone banking and mobile broadband banking which are readily available across the world today. The figure of 0% will shock and surprise many people but when you bear in mind the comments above in relation to mobile broadband then perhaps there is an underlying issue regarding reliability and cost? However, why is there such little interest in mobile telephone banking amongst expats?
It would be easy to say that banking companies in Spain do not offer telephone banking but we know this is not the case because telephone banking is popular around the world. We can only assume that potential cost issues and reliability issues with regards to mobile phone technology need to be taken into account and indeed the comments above would suggest that cost issues are perhaps more prevalent in the minds of many expats. However, if mobile telephone banking is not as popular in Spain as it is around the rest of the expat community (8.90% overall) then what kind of backup is their available if online banking is down?
This is the potential fly in the ointment with regards to online banking because if expats are literally putting all of their eggs into one basket and depending on such services, where is the backup? Banking companies around the world have invested large amounts of money in not only their online capabilities but also their telephone call centre capabilities. It is therefore vital that those who depend upon online banking to finalise and execute their financial transactions also have some form of backup in mind. When you also take into account the fact that we expect major changes in the Spanish broadband industry in the years ahead then there may well be times of unreliability and potential downtime.
Local branch banking (20.00%)
The figure of 20% is slightly above the average for the overall poll which came in at 12.22% but in many ways it does reflect the influence which UK banks seem to have in Spain and in particular in the expat community. A slow walk down many high streets in Spain will bring you across a number of well-known UK banking institutions that have direct access or indirect access via joint ventures to the area. However, it is a surprise that the figure for local branch banking is so high because in general the number of and branches around the globe has fallen dramatically over the years.
One of the main values of local branch banking is the fact that you are able to speak to advisers face-to-face and therefore in theory have your problems and your issue sorted out very quickly. Many people detest the ongoing investment in online banking which is seen as a faceless service and a very cold offering. However, it has to be said that the days of maintaining a relationship with your local bank manager and your local bank advisers have very much fallen by the wayside in favour of the online arena as more and more of the worldwide population gain access to the World Wide Web.
Local branch banking will have a role to play in the future for many people but if we are all honest, how many times have we visited our local branch bank in the last decade? The chances are that the vast majority of us have never been anywhere near our local bank and we are unlikely to do so as the number of online services continues to grow. It would have been interesting to see this figure say five years ago or 10 years ago and see the growing trend in the banking arena.
Other banking services (0.00%)
Despite the fact that postal banking attracted 4.55% of the overall vote this is an area of banking which very few people will ever have experienced. The figure in Spain is literally zero with very little in the way of interest with regards to postal banking which we can assume to include withdrawals, deposit, credit card applications, mortgage applications, etc. So what is the future of postal banking overseas, both for expats and domestic users?
The problem in relation to postal banking is the fact that while some people may not trust the online arena at the moment there is now the ability to forward forms and signed instructions via e-mail. This cuts out time delays which in this day and age should really be non-existent with the ability to literally send a message in a second. The legality of such e-mail documents has been questioned time and time again although the vast majority of banks and other institutions will accept these documents. You may well be asked to send the originals buyer post but instructions can be expressed via e-mail.
For those expats living in Spain and perhaps having bank accounts in the UK the idea of posting instructions by international mail just seems nonsensical in this day and age. There is the potential for the instructions to be lost, there are potentially enormous time delays and if there are problems with your instructions the situation could drag on even longer. While some would continue to fight the fight for postal banking services there is no doubt that every day online services are now very much taking the place of postal banking, even for those not happy with online banking.
We have covered the main banking services such as online banking, mobile broadband banking, mobile telephone banking, local branch banking and postal banking therefore it may not surprise some people to see no additional comments. We have seen some comments from other countries with some people suggesting “cold hard cash” amongst a more reliable banking service for expats.
The truth is that the online arena has literally taken over the world and not only the banking arena. The ability to literally check your statement, transfer money, take out new services and communicate with your banking provider online at any time of the day or night is a godsend for many people.
If still hesitating about which is the best option for your banking when overseas, Barclays Wealth & Investment Management gives you the chance to download for free a handy checklist.
Background to the poll
We will now take a look at the various issues which have been mentioned and which many expats will take into account when considering their banking services and their banking providers.
Security has been and continues to be one of the major factors dictating which type of banking service individuals will utilise. Online banking, mobile banking, local branch banking and postal banking all have very different characteristics but they all have various security issues which need to be considered. Perhaps the online banking arena catches more than its fair share of rogue press comment because of a number of high-profile data capture events by the criminal fraternity.
As a consequence it seems that the vast majority of those who use online banking are more than happy to blame their banking provider if security issues arise. Unfortunately, the truth is that we all have a role to play in the banking arena in relation to security because while banks invest millions upon millions of pounds into their online security this is potentially worthless if customers do not maintain even the more basic security measures such as antivirus software, ignoring rogue e-mails, etc. If one part of the chain is broken then security can be left open to the criminal fraternity who will be more than happy to jump in and spend your money.
There are fewer security issues with regards to mobile telephone banking, if used correctly, few issues with regards to local banking although missing post has been and continues to be a problem for some postal banking services. The issue of mobile broadband banking has also attracted a number of security issues for those using unprotected networks and basically allowing rogue elements to eavesdrop on their data transfer. As we have seen in numerous financial investigations, it is fairly easy to eavesdrop on transactions being carried out via an unprotected broadband network. Play your part and security should not be a major problem.
While security is for so many people the major issue in relation to their banking services there is no doubt that convenience is also a major consideration. This is perhaps why the online banking arena has grown dramatically over the last few years because literally you can logon and check your banking situation, carry out transactions, take advice, etc at some of the most unsociable hours of the day and night. When you also take into account that many bank branches are closed out of normal working hours then the attractions for online banking seem to grow.
Telephone banking and mobile broadband banking also have their own attractions because literally you can do your banking on the move whether verbally or over the Internet. For those who perhaps work on the move this is something of a godsend and just a few minutes each day will allow you to fulfil any financial obligations you may have. There are safety issues and security issues with regards to these particular services but so long as you follow the guidelines offered by your banking provider then you should be okay.
For many people the convenience of walking down to the local bank branch will never compete with the online arena but as more and more bank branches are closed or merged, for many people the opportunity will disappear in the future. This is definitely a sign of the times as is the fact that the days of knowing your bank manager and bank adviser by name have gone by the wayside. The online arena is more convenient than ever and more and more people are happy to do faceless transactions online.
Perhaps the most reliable service is your local branch bank as you can literally call in, speak to somebody face-to-face and ensure that your instructions are carried out. Even though 99.99% of the time you are unlikely to have any real issues with your online banking services there will be some times when it is not available. This will likely be at the moment when you require it most and can lead to frustration among some users. However, when you bear in mind the fact that local bank branches are only open a certain number of hours every day then any small amount of downtime for online services should be considered in this vein.
Telephone banking and mobile broadband banking also have reliability issues with regards to potential delays calling your bank call centre and the fact that mobile broadband is not always available across the board. Postal banking is also another issue to take into consideration because post can be delayed, post can disappear and instructions are not always carried out as efficiently and quickly as you might hope. So on the whole, bearing in mind the availability of such services, it is no surprise to see that online banking is the most popular service amongst expats living in Spain and will continue to be so for some time to come.
Despite the fact that there have been concerns regarding the broadband network in Spain, the reliability and cost, the government has recently clamped down upon anti-competitive behaviour. A number of fines have been dished out to Spain’s broadband providers and indeed we can expect significant investment and significant improvement in the short, medium and longer term.
The fact that online banking is so popular in Spain despite these drawbacks would suggest that the figure of 80% is likely to rise in the short to medium term. The online arena has for many people overtaken telephone banking, local branch banking and postal banking. Mobile broadband banking still has some way to go with regards to availability, security and reliability but this could well be the main growth area in the medium term.
Unfortunately for those expats who would like to do their banking with a local branch this service is like to reduce in availability in the short, medium and longer term. The online arena has given many banks the opportunity to offer expat services directly to their customers at the same time as closing down local bank branches and reinvesting money saved into their online operations. The expat banking world continues to grow and expat banking services are now more readily available than ever before. The world has changed over the last 50 years and the vast majority of expats living overseas will likely never use local branch banking if there is a broadband service available.
Mobile banking, both mobile broadband and mobile telephone banking, is something which is continuing to grow in popularity and assuming that significant investment is made in this area by governments, banking companies and broadband providers this is unlikely to change.