At a Finserv conference this week, it emerged that compared to their early adopter counterparts in the US, UK consumers are seriously lagging behind in the adoption of mobile banking services. In fact, the UK is also behind many developing countries in the
take up of m-banking.
This is borne out when you look at the success of mobile banking applications on the market. Of all the Lloyds customers who use online banking, only a small percentage has embraced mobile banking. Ping It, Barclays toe dipping exercise in the m-banking space
hasn’t really delivered – reports of uptake amongst Barclays’ customers have been pretty poor.
So why are UK financial services consumers more than happy to log on to their lap top to check balances, make payments and change standing orders, but mobile banking applications leave them a bit cold? Is the lack of take up of m-banking due to a lack of customer
demand or an issue with the supply of mobile banking technology from banks?
Security concerns sit heavily for many UK financial services customers. There is an inherent mistrust in the security of online banking services – most high street banks have responded to this in the last year or so and provided hand held pin devices to provide
that extra level of security. M-banking may well be one step too far for most banking customers.
However, poor take up of m-banking could well be down to the mobile services provided by British banks. New research out from Ovum has shown that European banks are falling woefully behind banks in North America and Asia-Pac in the IT spending race. European
banks - which already lag behind in banking IT investment – are earmarked to increase IT spend by only 1.8 per cent this year compared to 3.3 per cent in America and 5.1 per cent in Asia. Whereas banks in Asia Pac and the US will be driving resource into m-banking,
European organisations will be prioritising spend on compliance and regulatory initiatives.
This is problematic on a number of levels. It means that UK and European consumers will have increasingly few m-banking choices. It also means that European banks will fall behind the innovation curve on m-banking, making it more and more difficult to catch
up. This gifts a competitive edge to American and Asian banks, in a banking environment which is becoming increasingly global. UK banks need to act on m-banking and act quickly.