According to Forrester, number of US mobile banking users to double in the next five years and reach 108 million by 2017 — 46% of US bank being account holders. Mobile is already displacing all the other channels like physical and online banking. Until 2010, banks had only developed applications for iOS, but now there are applications for Android, Windows and Blackberry. Tablet development is a high priority now in mobile banking. Banks have basic functionality under control and now they are looking to add more functionality by taking advantage of phone features such as NFC, cameras, augmented reality and GPS. Helping customers find the branches and ATMs, helping them pay bills, simplify deposits, facilitate person to person payment, money management solutions are some examples.
Factors influencing the use of mobile banking
While the United States has adopted mobile banking widely, there are issues with adoption in Europe and it is dependent on various factors such as: internet adoption, affordable data plans, smartphone penetration and availability of traditional banking channels like branches and ATMs.
Customers are using both mobile websites and apps. In the US, 65% of mobile bankers use mobile Internet websites and 45% use apps, with some customers using both. In Canada, 79% of mobile bankers use mobile websites. In Europe, mobile banking apps are most popular in Sweden and France, where banks have been relatively quick to launch apps. SMS alerts still the most common type of mobile banking in Europe and are particularly popular in Spain and Italy, but they have never been as popular in markets like the US or Canada.
Mobile banking attracts upscale customers — Mobile bankers in North America and Europe have been early adopters. Some 71% of North American mobile bankers own a smartphone. The same parameters, such as age, income, and technology optimism, that drove the adoption of online banking over the past decade drive consumers today to check their bank account balance from a mobile phone. Apart from attracting higher-income groups, mobile services like SMS alerts can also attract customers who do not own a PC.
Predictions for the future
Mobile banking is going to become more ubiquitous and mark a bigger shift in the industry with the explosion of mobile internet, mobile banking and growth of mobile payments. Mobile banking is going to offer users much more than basic access to accounts. Mobile devices will give greater convenience through immediate control over finances. Mobile banking will have four big components:
Mobile money management — Personal and financial tools are becoming more popular with online banking
Mobile money movement — There is a movement from contactless payments in-store to Facebook payments, and PayPass contactless payments
Mobile digital wallets — firms are thinking on how to combine technologies like QR codes, NFC, personal finance management and others to convert mobile handsets to digital wallets.
Relevant, context based offers — customers use mobile banking to promote relevant products and services
Challenges to take mobile banking mainstream
Technology is moving fast and many banks are falling behind customers and competitors as they continue to rapidly adopt new technologies. Customer expectations are changing and so there is pressure on the mobile banking executives to constantly evolve and develop tighter solutions.
Non-banks are pushing the boundaries of innovation – companies like Apple continue to innovate and push the boundaries to revolutionize the way people use mobile phones. Independent developers are creating a wide variety of apps that offer insight into financial lives.
Customer expectations are rising – customers spend their time on apps like Dropbox and Instagram and their expectations from rise from their banking app.
Fears about security – consumers are still concerned about identity theft and fraud. And with the increased use of mobile devices, this may further accelerate.
Device fragmentation – there are still lots and lots of OS platforms with little plans of consolidation. And this huge diversity is going to continue to pose problems for mobile banking.
Native apps, mobile web and tablets — all of this is going to proliferate and banks need to be ready for it. Designing for small screens small and big, for all browsers will become a mandate.
