A poll of 150 European banks found that most respondents believe that mobile banking will fundamentally change retail banking in the next three to five years, ultimately capturing as much as a quarter of all transactions as customers shift away from branches.

Almost all banks (87%) polled aim to have a mobile site and 84% aim to launch some sort of 'app' within the next 12 months, up from 59% and 47% respectively today. Early mobile banking effort have focussed on routine interactions, such as checking account balances and recent transactions, but 70% of banks say they are planning to add more advanced functionality within the next 12 months as they upgrade their mobile platforms, with 10% planning a complete channel overhaul.

However, a "majority" of banks admitted that they have less than 10 employees dedicated to mobile, have only committed investment to the current year and have, at best, made only minor adaptations to commercial functions.

"They have, in other words, so far failed to create a new underlying mobile business model or clear mobile strategy," states the report.

McKinsey pins the reticence largely on the industry's failure to articulate a revenue-generating business case. "We also found a clear acknowledgement by respondents that telcos, internet giants and consumer-champions are better placed to develop key components of the mobile proposition," states the report. "A threat to which only a few leading banks appear to be responding by investing significantly in people and core capabilities as well as in IT."

In conclusion, the report acknowledges the dilemma facing the industry: "The mobile device creates distinct areas of opportunity but the economic benefit to the industry as a whole will be limited and the banks that gain most will be those that act quickly and decisively."