A recent report from KPMG assesses how the global financial community is responding to the adoption of mobile banking and mobile payments. The report is overwhelmingly positive and highlights some interesting points about the rapid developments in this innovative space.

KPMG states that most large banks and many mid-size banks already offer some form of mobile banking service. It supports this with the statistic that almost two thirds of respondents to its survey indicated that mobile banking is either already mainstream or on the verge of gaining traction.

The rapid adoption of smartphones and the meteoric rise of apps and mobile services have left little time for financial institutions to develop a robust business case and therefore a clear delivery strategy for their mobile proposition. The KPMG report highlights that this internal hurdle will be far easier to overcome, however, than external pressures including the development of standards and forming of new partnerships.

Interestingly, the report states that many banks have made incremental changes to their internet banking platform to deliver mobile banking services. I agree that this is a low cost approach but I disagree that it is low risk.

Banks that invest in this way are likely to find themselves stuck on a one way path that addresses the mobile opportunity in the short term but does not cater for the longer term developments. As the report says, there are still many unknowns when it comes to mobile financial services. The lowest risk approach at this stage, therefore, is to partner with third parties. They can take on the challenges of mobile standards, evolving mobile operating systems, security needs and payment functionality, on behalf of the financial institutions that seek to deliver the most cutting edge mobile services.