The final frontier for mobile banking

In the last few months, the market has been bombarded with news and vendor comments about mobile financial services. The overriding message seems to be that although mobile banking technology has been available for several years, more momentum behind mobile payments is pushing banking services onto the mobile channel in general.

We did a quick poll at a forum we held earlier this month to clarify what the current drivers and barriers for mobile banking are. Of those banks that already offer mobile banking, the majority use SMS services. This means that the customer benefits are limited mainly to a one-way interaction with the bank, receiving information without the ability to take action – not hugely appealing to the consumer.

Of those without mobile banking currently, the main reason for implementation is to increase customer satisfaction, according to 59 per cent of the poll. There is also an acknowledgement for the ability to reduce operational costs with mobile banking. That said, banks need to consider how to attract customers to use mobile financial services and therefore facilitate a reduction in their reliance on other more costly channels such as the call centre and the branch. The obvious way to achieve this is to ensure that the solution goes beyond a balance-only capability. A sophisticated and feature-rich customer experience is proven to positively impact customer adoption, forcing banks to go beyond SMS services and consider mobile web and mobile app development.

Interestingly, the poll indicated that although the financial services community may have been slow in the adoption of mobile services, 48 per cent said they will roll out mobile banking in the next 12 months and furthermore, their ambitions are high. Apart from account balance checks, the ability to make payments came very high up the functionality priority list, which indicates that banks are not only going to dive into mobile this year, they are going to do it with gusto.

But what will hold them back? Budget woes are the biggest obstacle to rolling out a new mobile banking channel according to more than a quarter (27%). Interestingly, despite some hype and inaccuracies about the risks associated with mobile banking, security is regarded by the industry itself as the lowest barrier to roll out. With budget being the biggest hindrance at the moment, it could well be that we see a domino effect – one leap of faith and all will follow.