Mobile banking to overtake online within five years

Analyst firm Juniper Research reckons more people will be using mobile apps for banking than web-based options by 2019, as the 800 million people who used their phones for banking more than doubles to 1.75 billion in five years.

In some mature markets this transition has already happened, with Bank of America announcing last year that more of its customers were logging in to their mobile services than their regular online system. But it’s thought that developed regions where consumer demand is greatest, often due to the fact that mobile is the first access to electronic banking a lot of people get, while countries such as China and India are massive potential mobile banking markets.

“The vast majority of global banks now offer web-based and app-based mobile banking options: particularly in developed markets where smartphone adoption (and banked penetration) is highest,” report author Nitin Bhas told Telecoms.com. “This is particularly the case given the fact that most banks are seeking to reduce their high street commitments and to offer lower-cost alternatives to consumers. In emerging markets, national banks are increasingly launching mobile services – often text-based – in metro areas where broadband penetration is sub-optimal, but mobile penetration is good.”

Bhas noted that push information is the most popular type of service, use by virtually all mobile banking users, but some other services are being adopted more gradually. “Adoption of mobile banking apps for balance checks and the like is already extremely strong,” he said. “One could argue that the key challenge lies in getting more customers to use the apps for transactional purposes – bill payment, mobile transfer and so on.”

Mobile banking is just one step in the broader mobile wallet play, which is still at an early stage. It’s one thing people checking their balances via an app, much as they have grown used to doing online, but it’s another entirely for them to put all their eggs in one basket by using their phone for all payments, tickets, loyalty schemes, etc. Not only is there strong consumer concern over the perceived risks involved, but financial service companies, phone makers, platform owners, retailers and countless other stake-holders all have to cooperate to make it happen. That takes time.