Wireless banking has taking the world by storm – but why hasn’t Australia jumped on the bandwagon?
Four hundred million people can’t be wrong.
That’s the number of mobile phone users globally who, it’s estimated, will be using their devices to carry out specific banking transactions by 2013. So says Howard Wilcox, author of the industry benchmark report, Mobile Banking Strategies: Application, Opportunities and Markets 2010-2015.
“This high-tech, networked 21st century means that we are able to stay in touch and access information 24/7. So its no surprise that we want to use our phones to check balances, last transactions, receive alerts on balance information, pay bills and generally manage their account,” says Wilcox. “Thanks to the rising popularity of applications, the proliferation of smartphones and greater familiarity with text messaging, mobile banking is now the most powerful trend in the financial services technology arena since the ATM.”
For banks, that has meant playing catch-up to invest in the technology required to support a mobile banking strategy – or be left behind. “Banks have been tripping over themselves to be able to cater for customers who want to carry out banking transactions and make mobile purchases. It’s important for banks and financial institutions to work proactively with their customers in order to assuage security concerns and develop a service that benefits both parties,” says Wilcox.
It should come as no surprise that the markets where mobile banking is strongest are the US and Europe. In this part of the world, however, the question remains that while mobile devices are so prevalent in Australia, why does the use of mobile phones for making financial transactions lag behind other uses?
According to a survey conducted by KPMG entitled Consumers and Convergence IV, 43 percent of respondents in Asia Pacific make mobile banking transactions at least once a month, compared to 30 percent globally. However, only 19 percent of mobile phone users in Australia use their phone for banking monthly.
A key reason for this, says the report, is a lack of awareness of mobile banking offerings. “Around 40 percent of Australian respondents did not know whether their bank offered mobile banking, compared to only 10 percent in ASPAC and 24 percent globally”.
Peter Russell, KPMG Financial Services Partner, was reported as saying: “Australian banks have tended to let consumers find their mobile banking solutions and have focused on this channel as primarily a way to facilitate mobile payments. As Australian banks are rushing to develop and improve applications for smart phones and the Apple iPad tablet, this gap will narrow very quickly”.
Australia also lagged ASPAC and global respondents when it came to the level of comfort in using their mobile phone for financial transactions. Twenty one percent of Australians are comfortable with mobile banking compared to 40 percent in ASPAC and 34 percent globally. Furthermore, 70 percent of Australians have never done any banking on a mobile device compared with 55 percent globally and 38 percent in ASPAC.
Australians have not yet made the shift to conducting investment transactions over their mobile phones with eight percent of respondents having done so within the last six months, and five percent in the last seven to 12 months. Eighty-seven percent had never made an investment transaction, such as selling a stock or bond, over their mobile compared with 53 percent for ASPAC and 71 percent globally.
“These numbers are not surprising given the maturity of mobile phone transaction activity,” says Russell. “We predict growth in investment transactions as business conditions improve and the functionality of mobile applications to conduct transactions improves. It is clear that mobile phone users have concerns over security and privacy with 59 percent of our Australian respondents sharing this concern.
"Mobile banking offers a real source of competitive advantage to Australia banks. While our results seem to show we lag other regions, Australian Banks are fast catching up following the release of a variety of mobile applications. Our survey provides Australian Banks with global and regional benchmarks of how popular mobile applications are likely to become in the very near future."
Likewise, Russell says their research has revealed substantial benefits for banks that can shift consumer attitudes towards mobile banking. “Banks have an opportunity to generate new business, attract or retain customers, control costs, and gain other advantages by deploying applications for mobile phone users.”
It’s obviously a topic that will be top of mind for the industry’s leading figures who will converge on the Gold Coast for the FST ANZ Summit 2011. Hosted by GDS International, the closed-door event takes place at the Palazzo Versace, Gold Coast, Australia from 27-29 July 2011.
Other hot industry issues that will be up for discussion include the evolving role of the CIO, accelerating the transformation to the cloud, leveraging integrated banking platforms and master data management.
FST ANZ Summit 2011 is a C-level event reserved for 100 participants that includes expert workshops, facilitated roundtables, peer-to-peer networks and co-ordinated meetings.
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