* Internet used for nearly 1 bln stg transactions/day
* Banking apps downloaded more than 14.7 million times
* BBA says branches remain integral to retail banking
* Banks looking to automate more within branches (Adds comments on changing use of branches)
By Matt Scuffham
LONDON, July 8 (Reuters) - Britons are using Internet andmobile banking for transactions worth nearly 1 billion pounds($1.7 billion) a day and branch use is falling sharply,according to the British Bankers Association and accountancyfirm EY.
In response, banks are expected to close more unprofitablebranches while they invest in mobile and online services forcustomers who want to bank while on the move.
Internet and mobile banking is now used for transactionsworth 6.4 billion pounds a week in Britain, up from 5.8 billionlast year, the report showed. Banking apps for mobile deviceshave been downloaded more than 14.7 million times - up 2.3million just since January - while Internet banking services aretypically receiving 7 million log-ins each day.
Royal Bank of Scotland said last month it wasinevitable that it would close more of its 1,900 branches afterbranch transactions fell by 30 percent over the past 3 years.Barclays, Lloyds and HSBC are alsoexpected 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 onrural communities that rely on local branches for bankingservices and called for measures such as branch sharing to avoidthe last branches left in a particular area being shut down.
But the BBA said branches would remain integral to bankingin the 21st century. It said 2,274 bank branches had beenrefurbished in the past two years, underlining banks' commitmentto their high street outlets.
"Day-to-day branch use is falling sharply and while the sizeof these networks will decline, high street outlets will remainimportant for those bigger moments, such as when a customertakes out a mortgage, wants to assess their financial options orresolve a complaint," the report said.
Banks are looking to automate more basic banking serviceswithin branches, such as withdrawing and depositing cash andpaying bills, freeing up staff to focus on offering advice. ButPaul Adams, chief executive of Glory Global Solutions, whichprovides self-service machines for bank branches, said Britishlenders have yet to fully grasp the opportunity provided by newtechnology to improve customer experiences.
"New technology allows and permits branches to be more openplan in the way they are presented. There is an opportunity herewith some of this technology to really drive up the servicesprovided to customers," he told Reuters.
RBS said last month that over 400 of its branches acrossBritain would be fitted with new technology including iPads sothat customers can register and access online banking.
Industry sources say a surge in the popularity of mobilebanking applications is the main driver behind the rise indigital transactions. One senior banking executive told Reutersthe growth in mobile transactions has been "phenomenal" over thepast two years. Consultancy Juniper Research expects the numberof customers using mobile phones for banking to exceed thosebanking via their personal computer for the first time in 2019.
The BBA report also forecast spending on contactless cardswould rise to 6.1 million pounds a week this year from 3.2million in 2013. ($1 = 0.5877 British pounds) (Editing by Louise Ireland and Sophie Walker)