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Mobile Banking: 500M customers by 2013.

Jan 21st

Posted by Jay Donovan

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Tagged: in Opinion
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Mobile Marketer points to research by ABI that notes the trend in mobile banking is on a furious incline.

ABI Research claims that the mobile financial services category has the potential to become bigger than mobile television and mobile content when measured by subscriber base.

“[The category has the] broadest demographic appeal globally of any mobile application outside of voice and text communication,” said Mark Beccue, ABI senior analyst for consumer mobility.

bomThis makes a lot of sense. As stated, phones and networks have reached a level of hardware  and software capability to withstand mobile banking needs and with Digital Millennial users (Gen Y) numbering over 100 million in number, it’s a match made in heaven–convenience driven users, familiar with tools of the digital economy–and "tools" is the important word here in explaining the quote above, I think.

To say that mobile banking stands to be more popular than subscriber based mobile television and content is, pardon the cliche, right on the money due to the sheer transactional nature of  the toolset provided by mobile phones and mobile Internet devices. Think about how many times you call or check online to transfer money or check a balance, per month. Now think about how many more times you would do it if you could graphically navigate the landscape of you accounts in one or two clicks from any location, instead of waiting thru 20 phone menus or waiting until you get back to the office/home? Probably more. I bet twice as much.  A mobile device is the perfect transactional tool  for moving nebulous amounts of money from one account  to another. A quick "in and out" procedure that seems to make much more sense for the masses than say, watching mobile video on your phone. I am not saying that there is no place for mobile video, I am just saying that I agree with the article in that mobile banking could get bigger, faster than some other mobile content. This is not to say that the other content channels are flawed or anything like that… just that their subscriber base will take longer to build and latch on than banking  customers.

The article goes on to say that

“Otherwise, this is a win-win,” Mr. Beccue said. “Consumers gain convenience and new services, [and] banks gain cost savings, stickiness and potential new customers.”

…and mobile developers with expertise in this arena will win with contracts and jobs. There are still things to work out  with regard to security and perception of security, but the banks that can still spend in order to create services in this channel, will surely pick up customers. I know that I lament my bank’s lack of mobile features everyday. I contemplate switching regularly. I think I just might.

Would love to hear what you think. Post your thoughts or mobile banking success/horror stories.

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  • “Otherwise, this is a win-win,” Mr. Beccue said. “Consumers gain convenience and new services, [and] banks gain cost savings, stickiness and potential new customers.”

    What new services will they provide over existing online banking options? Will they allow you to make transactions via text messages (if you've registered your number)? What else could there be?

    @Zealot:

    The nearly weekly announcment of companies being hacked and losing confidential customer data doesn’t help matters. I think it will be a few more years at least until the mainstream trust their cellphone as a financial tool.

    I don't know. There are systems in Asia where you swipe your phone to make payments, I believe, so lots of people are already using their phones as financial tools.

    Also, remember that banks have been on the Internet for a long time. Mobile banking will probably just be a mobile version of a bank's existing Web site. If you trust that site's security, and the bank's site works on your phone (meaning the browser security is strong enough), I think people will trust it.

    My problem is that, for the most part, the only time I use online banking is when I'm paying my bills. That happens at home, where I have the bills and my financial programs on my PC. So I don't see very many instances where I'd want to use mobile banking.

    I suppose I might check a balance occasionally. If I forgot to transfer money from my savings account to checking for my bills, I could do that while mobile (assuming I remembered after the fact). People who are "bad" financially and rely on the float may log on to see if checks have cleared before they write another check, but the float has gotten shorter with EFT and Check 21 (or whatever the imaging program was called).

    But most of what I need to do I also enter in my financial programs, so I probably wouldn't do many transactions while moble.

    However, if they can make my phone print money so I don't need to visit an ATM, I'll be all over that. :-D Before you laugh (as I was doing), it's not impossible. The US Postal Service lets you print your own stamps with bar codes. Why couldn't the Treasury Department let you print money the same way?

    Steve
  • I completely agree that mobile tech makes perfect sense for expediting financial transaction...I am not sure it will be embraced that quickly.

    People are very hesitant about banking and such things...look how long it has taken for online shopping to begin to take off.

    The nearly weekly announcment of companies being hacked and losing confidential customer data doesn't help matters. I think it will be a few more years at least until the mainstream trust their cellphone as a financial tool.
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