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Mobile Banking, not my cup of tea...

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.


Comments: (3)

A Finextra member
A Finextra member 16 February, 2013, 14:10Be the first to give this comment the thumbs up 0 likes

Over 7 million people in the UK are Mobile Banking users.

Over 35 per cent of Lloyds Online Banking customers are active Mobile Banking customers (logged in over the last 3 months).  I would hardly claim that no one uses it. 

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 19 February, 2013, 07:59Be the first to give this comment the thumbs up 0 likes

Nowhere is the tradeoff between convenience and security more pronounced than in mobile banking. There's a school of thought according to which "banking is banking is banking, therefore mobile banking must use the  same level of security as Internet Banking". However, I'm not sure if many members of this group would be comfortable about entering so many details on the touchscreen keyboards of their smartphones. There lies one of the major hurdles to adoption of mobile banking.

On another note, if UK customers don't really care much for mobile banking, banks shouldn't spend too much time and energy in this area. IMHO, it doesn't make any business sense to keep pushing a mobile banking agenda just to avoid falling behind the innovation curve. 

A Finextra member
A Finextra member 19 February, 2013, 11:00Be the first to give this comment the thumbs up 0 likes

There are far fewer people in the UK who don't have access to the internet than in Asia or Africa, therefore why would they want to use yet another menthod of access?  What could be so important that you could not check on an ATM, get into work or wait until you get home to do.  Mobile banking is filling a space in other places that isn't there in the UK.

Is this more about "being left behind" than "this will make your life so much easer"?

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