Our Mobile Banking Sites May Not Be Good Enough — Here’s Why

“In the developed economies, such as Singapore, there is high banking penetration and mass adoption of smartphones and hence consumers have been using mobile banking for a while… In developing economies such as Malaysia, we see 140 per cent mobile penetration with more than 10 million smartphone users and banking penetration north of 60 per cent.

“In frontier economies like rural Indonesia or Cambodia, banking penetration is measured in single digit percentage whilst mobile penetration is over 110%. The relevance of mobile banking in these economies is paramount as banks are forced to look to mobile as the principal distribution channel for financial services, not just a complement to more traditional bricks and mortar, because in many cases the bricks and mortar (and other infrastructure) doesn’t exist…

“The advent of smartphones and the multiple services that have popped up across the entire user spectrum has set an expectation and a standard that banks are being forced to step up to. Customers increasingly expect to bank anywhere any time and so it is becoming a standard demand as a channel. This view is supported by the radical growth in numbers seen in the last few years and forecast for the next; between 2008 and 2015 we’re expected to see global growth from 200 million users to over 1.3 billion and transaction numbers growing from 5.4 billion to more than 167 billion.”

“After years of unfulfilled promises, the mobile payments market is picking up speed. Whilst still a fragmented landscape, it is clear to many that there are significant revenue opportunities here for the organisations that get it right. The threat to the banks is that many of those organisations are outside of banking and potentially highly disruptive to what is an important revenue source.

“For example we are seeing third parties such as PayPal making decisive moves, with rumours Apple are looking to enter the market. There are also a number of successful MNO (mobile network operator) deployments such as SMART and Globe in Philippines who arguably have disintermediated not only an immediate revenue stream but large numbers of future bank customers.

“As far as growth goes, it is clear that servicing requests via the m-channel is substantially cheaper than through the human and even other automated channels. In addition there are numerous opportunities to create additional revenue streams based on innovative mobile services.”

“In Asia we have a number of frontier and developing economies, in general the banking penetration is low in these areas and that causes both social and economic challenges. For the unbanked individual, the opportunity to move from cash only and engage in the banking system, to be able to save with interest and borrow at reasonable rates, creates value over and above just the money.

“Banking thereby becomes a force for social good. For the bank it is a way to profitably serve a whole segment of customers who otherwise have traditionally not been able to be engaged, many of whom will in the future substantially improve their wealth and thereby become customers for increasing services and products.

“For the country, moving people from the cash economy to the banked economy reduces macroeconomic inefficiencies and can have measurable positive impact on GDP. Our work with clients such as ANZ Pacific and ACLEDA has proven this repeatedly.”