For some time, customers have been able to view their account using a mobile phone with internet capabilities, seeing the previous several transactions made and checking their balance, but the new development marks a dramatic move forward.

The new development in mobile phone banking will allow customers – by way of downloading some simple software to their phone – to transfer money between their own Lloyds TSB bank accounts, after entering a six digit security code.

Next month, Lloyds TSB will become the first bank to roll out the new service – the technology even exists which would allow customers to pay money into other people’s accounts, but the banks have decided on a gradual process for bringing in the new system until security has been improved to a higher standard.

The service will cost £2.50 a month for most customers, but some who have premium banking customers will receive it free of charge, as will holders of the Lloyds TSB student account until October next year.

Customers who receive the service will also have access to a wider range of text message alerts – many banks already inform their customers via text message of their account balance and when they are about to exceed agreed overdrafts.

Now, to keep them more up to date with their finances, Lloyds TSB customers can opt to receive ‘High Balance’ and ‘Low Balance’ alerts, which will alert them when their account balances reach, exceed or near certain levels. They can then use the new transfer feature to move money between their accounts as and when they need to.

Another new text alert, this one free, will inform customers when their debit card is used abroad, either to withdraw cash from a cashpoint or to make a purchase, which is intended to give customers more peace of mind.

The new service is a reaction, in part, to research which shows that nearly three quarters of Brits use online banking to manage their finances, that 60 per cent of people want the ability to keep track of their money with their mobile phone, and 53 per cent said that they would like to be able to transfer money between their own accounts using a mobile.

“Technology is evolving at lightning speed and with these changes come new demands from our customers and new possibilities for products and services to meet their needs.” said Catherine McGrath, director of current accounts at Lloyds TSB of the new service.

“Gone are the days when we used our phones only to call friends and family. Mobile phones are now part of our daily lives in a way few would have imagined just a few years ago. Just as Internet banking has taken the country by storm over the past decade, mobile banking is now set to change the way we mange our money.”

© Fair Investment Company Ltd