There was a recent article in Forbes about how mobile is the future of everything. The author wrote,“The day is soon coming when using a desktop computer that resides in a large box and is attached to a bulky monitor will be the domain of specialists and the laggards of the technology adoption lifecycle – everyone else will use a smartphone and nothing else.” But just how soon are we talking about? And what does it mean in the banking context?
The facts and figures
According to Mobile Marketing magazine in 2013 72% of Britons were smartphone users. That is about 45.8 million smartphone users in the UK. The majority of operations made on a smartphone included surfing for information (70%), using navigation maps (63%), updating social networking sites (59%), and searching for product information (57%). And then there was banking with 51% of smartphone users taking advantage of the miniature banking facilities in their pockets.
The Payments Council has predicted mobile payments to become a major payment channel over the next 10 years. Yet, considering the speed at which the smartphone user base is growing and the mobile readiness of so many other industries, it is rather surprising that mobile banking hasn’t flourished even more by now. There are two main reasons.
First, many users find having their financial data reside on a little gadget they could easily lose unsafe, thus relying on the more conventional online banking or going to a branch. While disregarding some common sense safety precautions might lead to security issues, many experts say the fears about the unsafety of mobile banking are greatly exaggerated. Banks are investing heavily in their security technology, and all information transmitted between servers and the mobile device is encrypted as with regular online banking.
The second reason is that some banks’ mobile apps are not yet as convenient to use as customers would expect. Either their functions are restricted to a handful of what the internet banking offers, or are otherwise inconvenient to use (e.g. limited screen size). Another side of this is that banks have a hard time advertising their apps to their customers and convincing them of the apps’ safety and convenience. Some customers have also cited poor technical support for app users.
What to expect from mobile banking innovation?
Mobile banking initially means banking on the go – the technology that we currently have already gives us a possibility to bank from anywhere at any time. We can transfer money, check our statements and account balance, and search for the nearest branches and ATMs, all on our mobile device. But there’s so much more to look forward to.
Near field communication (NFC) devices are spreading into the retail industry, which means it’s becoming more and more common to purchase goods by just waving one’s phone in front of an NFC device at the check-out. The next step will undoubtedly be making payments between individuals faster and easier than ever, using NFC devices in our phones. Looking at these trends, our phones will be carrying even more importance to us in our everyday lives than they already are – this time around, as our wallets. There are also banking apps being developed with core emphasis on making keeping an eye on one’s finances and easier and saving less tricky.
Besides the shift towards a more convenient banking experience for the banked, mobile banking is also making life easier for the unbanked. In countries such as South Africa and Kenya, where branches are few and far between, mobile banking is helping customers carry out transactions wherever they need to, without having to travel vast distances to a branch.
When we think about how much information each smartphone holds about its user – personal data, interests, social circles and consumer patterns – we can easily see how the banking sector is bound to become more personalised through mobile banking apps as well. We are probably looking at personalised financial advice depending on our spending habits, offers on making cheaper payments to our frequent recipients, and other personalised services.
Regardless of what the innovation is going to look like, one thing is certain – mobile banking is the future and it’s going to represent a much easier, faster and more convenient banking experience. And while the banking industry is investing more and more into innovative technologies, for the consumer, there’s not much more to do than to sit back, relax and watch the banking world move into their pockets.