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Erik Bogaerts

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Erik Bogaerts - Naqoda

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Mobile banking quickly reaching maturity in Europe, really?

26 October 2010  |  4486 views  |  3

This was a very unexpected statement from one of the speakers at the Mobile Keynote at Sibos 2010.

Next time you do a presentation, try the following with your audience.

Ask how many people have a mobile phone. 100% show of hands.
Ask how many people have a smart phone. 50% to 70%.
Ask how many people have more than one smart phone. 10% to 15% (make a note of their names and don’t invite them next time, they’re geeks).
Ask how many people use their smart phone for mobile browsing, gaming, etc, anything other than making calls. 100%.

Then ask how many people do mobile banking on their phone. 3% to 5%.

And that corresponds exactly to recent statistics from the US where banking channel usage preference is shown as 50% via the internet, 25% via branches, 15% via ATMs and 5% via mobile.

I know we all like to juggle with statistics when we’re trying to sell something and that’s fine when we talk about forecasts. That’s what we pay our analysts for, right? But to come out with statements like this about mobile banking maturity today goes a bit far, does it not?

Now if you were to ask this in Kenya or India, you would get very different answers. If I got a Euro every time someone mentions m-Pesa, I would be writing this blog from an iPad. At the rate at which this is going, soon m-Pesa will enter the English language just like Google did. I don’t search the web anymore, I google it. And I won’t be making a money transfer, I’ll empesa you.

In my next blog I’ll write a bit more about mobile and how it’s not just a channel but the most disruptive technology since the Gutenberg press and the internet. We have always wanted to know our customers, well now we can.

And you’ll understand the opportunities. You’ll understand that you need to act fast, because if you don’t, you’ll get m-Pesa’d soon enough.


Comments: (3)

Brett King
Brett King - Moven - New York | 26 October, 2010, 20:26


The problem is that banks look at this and say only 3-5% of smartphone owners use mobile banking, but of course, it doesn't occur to them that this is because they don't actually provide a mobile banking option for their customers. So even if they WANTED to use their phone for mobile banking, they actually couldn't. It becomes a self-fulfilling prophecy.

As bankers we have to start building journeys to make engagement with customers easier, frictionless. Mobile and internet are massive opportunities, but are so underserved today it is ludicrous. For example, 90% of daily visitors to retail bank websites click on the login button, but the amount of revenue generate behind the login - minimal...why? Because we aren't selling stuff behind the login.

Banks need to focus on behavior of customers - clearly customers are highly mobile, time poor and use these devices for just about everything else, so what is the reason they aren't doing banking on the move? Because as banks we just don't adequately support the channels.

Brett King, Author - BANK 2.0

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A Finextra member
A Finextra member | 27 October, 2010, 07:51

This 3years old article shows how Europa is late with Mobile payments : Dial M for money -- http://www.economist.com/node/9414419

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Salil Ravindran
Salil Ravindran - Oracle - Bangalore | 01 November, 2010, 10:53

The adoption rate in mobile banking is poor probably because of the auto-pilot mode that most retail banking transactions have gone into. And unfortunately, adoption rates are visible only when they come into the retail banking space.

If one takes a look at the most common activities that you might do on your current account or savings account, they are heavily automated for periodic triggers

1. Transfers - I setup standing instructions today

2. Liquidity  - I  setup sweeps today for better interest

3. Payments - I setup direct debits today.

Needless to say, the only specific instances when I need to do an out of turn transfer, I can get behind a PC

Rate of adoption of m-banking can improve significantly only if we enable

1. Investments over mobile devices

2. Business banking over mobile devices.

Investments does not mean just trading, but it needs to be supplemented well by appropriate financial tools for me to at the bare minimum track and maintain my portfolio and the returns on it. Hopefully we can expect some great apps on the markets soon which will make this a reality.

Business banking - Enabling the corporate treasurer to better track his liquidity, timely alerts and enabling him to take simple (we are not talking about complex cash management stuff here) but effective actions such as transfers based on these alerts are a must for this to be successful in business banking.

I guess run of the mill retail banking is a wrong place to start with to increase the rate of adoption of m-banking - that is if you keep aside micro-payments which is a different segment altogether.

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Erik Bogaerts is the owner and director of Naqoda, a FinTech company providing software solutions to the financial industry.

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