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Mobile banking users set to double over next four years - KPMG

03 August 2015  |  18091 views  |  0 Mobile banking on smartphone

The number of mobile banking users globally is forecast to double to 1.8bn over the next four years, encompassing over 25% of the world’s population, according to research by KPMG and UBS.

Using primary survey data supplied by UBS Evidence Lab, the Global Mobile Banking Report, finds that while mobile is already the largest banking channel by volume of transactions, its adoption by new customers is now entering an exceptionally rapid phase.

The report warns that banks who do not have clear mobile banking strategies will lose customers and cross-sell opportunities in the short-term, as well as risk jeopardising competitive advantage.

In order to take advantage of the surge in mobile banking, banks should investigate the potential of value added services, says KPMG, suggesting that virtual customer support can bring the personal touch of a branch to a handset.

Banks need to tread carefully, however, for fear of invading what the report calls 'device intimacy' by bombarding customers with unwanted sales pitches. Instead banks should seek to offer 'personalised support' supplemented by added value features such as social media sharing and cloud storage.

They should also invest in up-and-coming mobile-enabled technologies such as wearables and augmented reality as they proliferate, and provision APIs to the developer community to expand the innovation opportunity.

"Mobile banking is clearly supplanting all other channels as the main portal between the bank and the consumer," says David Hodgkinson, KPMG’s UK digital and mobile banking lead. "Banks must overcome substantial infrastructural challenges, and reconcile consumers’ appetite for ease of use with greater security. Boldness will be required to overcome these challenges, and the only sure-fire winner will be the consumer.”

UBS analysts in concert with KPMG surveyed 67 bank management teams in 18 countries. Those banks on average expect a 5.6% reduction in branches as a direct consequence of their mobile banking strategy, with an associated ten percent reduction in costs and six percent revenue uplift.

Says the Swiss bank: "We believe mobile banking will be a transformational technology in the future and that businesses that are more committed to this technology are likely to see the most benefit in the years ahead."

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