The future of mobile banking
Mobile banking has evolved considerably over the past several years. Changing consumer preference and behavior, differing approaches and solutions offered by solutions providers, and developing trends in mobile technology have considerably increased the value of mobile banking to both consumers and financial institutions. Two years ago, when the first version of this paper was published, mobile banking was still in its infancy. Mobile deposit was a new technology that was relatively untested.
Mobile payments were still in the early development stage and not yet widely available. Very few financial institutions treated the mobile channel as the primary way they would engage their customers. Instead, they considered it to be an extension of online banking. Consumer use cases and pricing models for new features were not fully understood. Generally, there were strong indications that mobile banking was becoming a significant channel for financial institutions, but it was unclear what the ultimate impact would be on traditional banking models.
From a technology perspective, WAP and SMS functionality were both seen as necessary components of a mobile channel that included native apps – usually called the mobile banking “triple play.” Smartphones were growing in popularity, but had not yet come to dominate the market for mobile devices. In fact, in 2013 smartphones accounted for 54% of the 1.8 billion mobile phone sales worldwide and are expected to reach as high as 69% of total sales for 2014, according to Gartner. From the perspective of the financial institution executive trying to understand the mobile channel, it was unclear what consumers expected and what the viable options were for delivering a product that addressed their needs.
Would consumers widely adopt mobile banking or would it be specific to a particular demographic or income bracket? Would mobile banking replace online banking, or supplement it? What platforms, operating systems, and devices were going to survive and how many would need to be supported? And, most importantly, what was the business case for the financial institution – cost savings, fee income generation, competitive necessity, or a blend of all the above?
We now know that mobile banking appeals to all demographics and is augmenting existing online banking services rather than replacing them. Mobile banking is now as fundamental to the product offerings of financial institutions as debit cards, ATMs, and online banking and a clear separation exists between the institutions that understand the unique value to consumers and the institutions that are struggling to create a compelling mobile product offering.
Bluepoint’s whitepaper, “The Future of Mobile Banking,” identifies the key trends that have shaped mobile banking in the last several years and future developments that will continue to disrupt established banking models. It is meant as a framework for financial institutions that can be used to craft an intelligent mobile strategy.
