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Increasing Adoption of Mobile Banking Worldwide Cues Growing Confidence on MNOs and Mobile Security

With the phenomenal growth in the usage of mobile data which started about 5 years ago on the back of faster speeds brought by 3G and the proliferation of social sharing applications, many predicted that the mobile Internet will become the biggest consumer technology of our times. Despite this, however, there was a lingering doubt, even with the stellar growth recorded by leading Mobile Network Operators (MNOs) worldwide across their mobile data services, as to whether the mobile Internet will be able to take over EVERY activity conducted over the Internet, especially critical and important transactions such as banking, official communication and confidential information transfer.

Today, however, we have enough data to show that there is nothing that is not conducted on Mobile Internet that was previously conducted only on fixed connectivity. Infact, over the past years, consumers who migrated their online activities in bits and pieces to their mobile devices are moving lock, stock and barrel, and are using their mobile devices for almost everything - from watching rich videos, to sending those confidential work emails to, most interestingly, conducting banking and financial transactions.

Barclays Mobile Banking App on iTunes

The trends in mobile banking are of paramount significance to any digital service provider looking to capitalize on the growth in the use of mobile Internet. These trends provide the cue on the readiness of today's mobile consumers to take more and more online activities to mobile, pointing to consumers' perception of the security and reliability provided by their MNOs on their connectivity. It also points to their confidence and trust of the digital service providers, in this case the banks themselves, in ensuring the reliability, safety and security of the service. While the growth in overall online banking transactions was already indicating this trend, the rise of mobile banking shows that consumers are not just confident of their banks, but they have similar levels of trust and confidence placed on their MNOs in ensuring the safety, reliability and security of transactions conducted on mobile connectivity. 

Forrester Research, a leading research and advisory firm recently released a few figures on the uptake on mobile banking based on a survey of 61,000 consumers in the US and 17,000 in Europe. The research showed that 36% of US and 25% of EU consumers are active mobile banking users, compared to 13% and 9% respectively four years ago in 2011. 

Forrester provided an interesting breakdown of the transactions consumers conduct with their banks using their mobile devices, with 80% of users in the US using their mobile devices to check their account balances, 52% using them to view a recent bank transaction and 45% to make intra-bank transfers. For Europe, balance checking stands at 78%, viewing or checking a recent bank transaction at 53% while receiving an SMS alert takes the third position at 40%.

Bank of Ireland Mobile Banking App on iTunes

Mobile commerce is of course one of the biggest push factor that saw the rising adoption of mobile banking. Mobile commerce necessitated the use of online payment methods, with PayPal familiarizing a large number of online customers to online 'money' accounts. The introduction of debit payment methods which enabled users of online banking services to link their payments to their bank accounts and make purchases conveniently further proved to many customers that online banking is one of the fastest way for paying for a wide range of goods/services offered online. 

JPMorgan Chase Banking App on Google Play Store

At the same time, banks enabled customers to register unlimited number of payees on their online banking accounts, and make either recurrent or one-off payments to various parties ranging from utility companies to insurance and cable service providers. Furthermore, mobile devices have become popular conduits for receiving monthly bills, either via SMS, emails or via merchant's online accounts. Purchasing online, being billed online and paying online have all become such a norm and with mobile banking apps whose interface is highly optimized with easy navigation and simplified processing of various third party bills, it will not be a surprise that more and more customers will be using mobile devices to affect bill payments especially with the increasing number of subscription services being signed-up by today's digital consumers.

According to Forrester's research, 35% of mobile banking users in the US have viewed or received a bill using their device, and 16% of them have added a new bill payee directly on mobile, though for Europe the number if much lower at 24% due to the higher level of bill payment automation, according to the company. 

Leveraging on the take-up on mobile banking is the growth of mobile wallet service, which is in effect, a virtual deposit and debit service combined. And MNOs are making foray into mobile wallet services by introducing both the virtual wallet and mobile money accounts that enable consumers to bank via their mobile devices without actually having a bank account, especially for unbanked consumers. Finally, MNOs are offering direct carrier billing services by partnering with a wide range of merchants to enable consumers to use their mobile devices to pay and charge their payments to the Operator's bill, effectively creating a mobile 'credit card' service, akin to the credit facility offered by banks on their traditional credit cards. 

Author

Executive Editor and Telecoms Strategist at The Fast Mode | 5G | IoT/M2M | Telecom Strategy | Mobile Service Innovations 

Tara Neal heads the strategy & editorial unit at The Fast Mode, focusing on latest technologies such as gigabit broadband, 5G, cloud-native networking, edge computing, virtualization, software-defined networking and network automation as well as broader telco segments such as IoT/M2M, CX, OTT services and network security. Tara holds a First Class Honours in BSc Accounting and Finance from The London School of Economics, UK and is a CFA charterholder from the CFA Institute, United States. Tara has over 22 years of experience in technology and business strategy, and has earlier served as project director for technology and economic development projects in various management consulting firms.

Follow Tara Neal on Twitter @taraneal11, LinkedIn @taraneal11, Facebook or email her at tara.neal@thefastmode.com.

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