Mobile Banking Services, or Bank on-the-go if you prefer, is getting so strong in some countries and with some segments of population like the Millenniums that Banks must now act quickly to understand its trends and become key players to profit from it.
One of the key factor of Mobile Banking Services growth is the high penetration level of Smartphones in Western countries where 50% of owners have been using a mobile banking application. All major Banks in North America have deployed or developed Mobile Banking Services in recent years which a large part of their Clientele is using.
In countries where a large proportion of the people is unbanked, cellular phones are being used as a commercial vector of all sorts!
“Banking is essential, not Banks,” famously said Bill Gates, CEO of Microsoft, in 1994.
And one cannot help but notice that the risk of private information and data breaches or leaks through online or mobile banking services and applications although lesser is still present in the mind of 35% of the Western populations which put security as their top priority in this domain.
Nevertheless, Western Banks do offer mobile banking services even if limited to basic operations:
- Balance check
- Bill payments
- Money transfers
- Funds transfers
So, where do we stand now and where are we going? What are the major trends in this fast-growing field of activities?
5 Trends in Mobile Payment and Mobile Banking Services on the Western front
N.B. Data from MEF Fall 2015 Survey.
In-store payment is indicative of what’s to come
12 % of people have made a proximity payment in the last six months:
- 4 % via NFC
- 7 % through a mobile Point-of-Service device
- 5 % via a mobile loyalty card scheme such as Starbuck mobile application
N.B. The Starbuck proprietary mobile application generates 8 million mobile transactions per week for 16 million users.
Social (and Messaging apps) is the future of Commerce
- 24% of Smartphone users indicate that a social media page is their 1st destination for mobile commerce
- 56 % of respondents prefer to make a purchase through a mobile application rather than a mobile website, and most often through a messaging application
- All major Social Networks are copycatting the Chinese mobile messaging application WeChatwhich boasts a comprehensive socio-commercial ecosystem; Line in the Asia Pacific region is also a very good example, allowing users to connect their messaging accounts with a credit card; they can then move money to friends or buy items at selected stores
The great comeback of the « brick-and-mortar” store
- 58 % made a purchase in-store after surfing the mobile website
- 58 % are doing some showrooming
- 28 % made a mobile purchase while in-store
Adoption of Mobile Banking Services (with an application)
- 69 % do Mobile Banking
- 28 % check their account balance
- 18 % transfer funds
- 16 % send money
- 9 % made a loan request
N.B. « Banking-on-the-go » will only grow stronger considering that Millenniums, of which 70% already use a Mobile Banking Application compared to 20% for the 60-year plus, will soon be 85 Millions!
Speed (conveniance) and comfort
32 % of consumers consider those 2 criteria as the most important when it comes to rating a positive mobile banking experience; hence, using prints (either finger or iris) is a great opportunity for Mobile Payment and Mobile Banking Services suppliers to create such a fluid, fast, comfortable and convenient mobile purchase experience.
Final Remark – Mobile Wallet
Although there has been much noise around the launching of the Mobile Wallet, consumers are still slow to see its advantages.
- 18% ignore what it is
- 15 % don’t see the usefulness
- 15 % don’t know anybody using it
5 insights on Mobile Payment and Mobile Banking Services
In countries where Smartphones are the first communications channel and a large chunk of the population is unbanked, mobile transactions and payments have become the standard and such Services as Mpesa and Fundamo have initiated a mobile money revolution in Africa and Asia.
- In Kenya, Mpesa has offered some kind of Mobile Payment and Mobile Banking Services since 2007.
- In a 2015 international survey, 80% des respondents in Indonesia admitted doing some mobile banking activities, 85% in Nigeria and 93% in Kenya.
- 37 emerging markets now counts 411 millions registered mobile banking accounts.
- In December 2015, Mobile Banking Services suppliers have processed one Billion transactions, which is twice PayPal globally.
- Mobile Banking Services suppliers offering an International Funds Transfer Service have seen the number of transfers increased by 52% in 2015.
Main Mobile Transaction and Mobile Banking activities in emerging markets
- pay for physical goods
- bill payments
- transferring money P2P
- accessing digital goods and services
Denis Paul & Michel
Sources : GSMA State of the Industry Report – Mobile Money 2015, MEF 2015 (Mobile Ecosystem Forum)
Image Credit : Tashatuvango / Shutterstock
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