Mobile banking adoption will be twice as fast as online, says tech vendor

23 November 2011

The adoption of mobile banking among consumers will be twice as fast as the take up of online banking, a technology vendor has predicted.

Carl Tsukahara, chief marketing officer (CMO) at Clairmail, a mobile banking solutions provider, said: “Mobile has been growing at a much faster rate of adoption than Internet banking. The biggest difference between mobile technology and previous models is that every single consumer has a device. And some parts of the world are purely mobile. In some places no landline network exists.”

“Online banking has been in place for ten years and at the high end, has attracted an estimated 60 per cent of customers. Mobile adoption, at its current pace, is expected to be much faster than this.”

Findings from the Next Generation Mobile Banking: Strategies for Success report, which was commissioned by Clairmail and undertaken by Forrester, showed that all of ten of the leading banks questioned are currently investing in the development of their mobile channel - which illustrates how the question surrounding mobile banking is ‘when’ is it going to take place rather than ‘if’.

Mr Tsukahara said that the fact that every bank questioned said they saw mobile as a potential revenue generator was one of the most important findings of the report.

According to the study, the top three objectives for mobile banking are:

o Retaining customers (10 out of 10)
o Differentiating/innovating (8 out of 10)
o Increasing product sales (8 out of 10)

The research also found that banks are looking to expand on what their mobile applications currently offer. Many financial institutions questioned already offer basic functionality - including account access, transfers between accounts and alerts. Now banks are looking to expand this to include other services such as wider account access and full transaction histories.

Top three mobile banking functions banks intent to offer in the next two years:

o Outbound Marketing (10 out of 10)
o Account, security and fraud alerts (9 out of 10)
o Mobile money management (6 out of 10)

Clairmail's executive said that it is critical for financial institutions to offer consumers a useful service with their mobile banks.

He cited American Express’ (Amex) recent activity as an indication of how the larger players in the financial services sector are beginning to invest in new technologies and mobile solutions platforms versus trying to do everything in house.

The firm has set aside $100 million in a fund focused on start-ups in the digital commerce space as part of a strategy to increase innovation and use of new technologies.

Harshul Sanghi, the recently appointed managing partner of Amex’s Enterprise Growth Group, said the changes are taking place as the payments industry undergoes “a fundamental change”.

By Jim Ottewill

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