Further improvements in mobile banking functionality will allow it to become the most frequently used channel of contact between customers and banks in the future. Providers now need to ensure they focus on convenience and security.
Mobile banking is currently experiencing an upsurge in popularity across the world, driven in part by a rise in smartphone ownership. The number of touchpoints through this channel is rapidly increasing, and penetration rates are far higher than those seen for online banking when that channel was at the same stage in its lifecycle.
Our 2015 Retail Banking Insight Survey confirms that mobile banking functionality is increasingly viewed as an essential prerequisite by consumers in Asia, particularly in Hong Kong where 48% of consumers have used this channel in the past year. Across Asia mobile banking is used mainly to conduct routine activities such as transferring funds, paying bills, and locating ATMs.
With consumer habits shifting to new technologies, there is a need for banks to provide convenience and security to ensure greater participation and gain a competitive advantage.
The real value proposition of mobile banking is that it’s an “always-with-you” tool that can set the stage for services not previously offered through the online channel.
Demand for convenience is growing across the region, with Hong Kong unveiling its first mobile-only bank, Neat, earlier this year. Much like the UK’s Mondo, Neat operates from a smart budgeting and savings app that uses “data-led insights” to give customers a clear picture of their entire financial situation. Neat complements this with a range of tools for tracking spending and managing financial budgets. Banks must focus on making the tool easy to use in order to acquire and retain mobile banking customers, otherwise they’ll be at a risk of being left behind by more innovative rivals.
Neon, a smartphone-based bank targeting millennials, recently launched in Brazil and uses facial recognition technology to authenticate its customers. All smartphones now have cameras, and banks are increasingly utilizing these to improve functionality. A log-in process that involves advanced identification technology such as facial recognition communicates to customers that a strong security protocol is in place.
The integration of increasingly secure authentication techniques with the convenience of the mobile channel will help banks to improve the customer experience, while simultaneously saving time and improving efficiencies internally.
By Resham Karira, Retail Banking Analyst