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Viewing report
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Internet Banking & Mobile Banking
GBC Consulting, June 2011, Pages: 115
While bank branches are still very much part of our urban landscape, the move towards internet banking as a complement to visiting a branch, if not a replacement, seems unstoppable. The online channel is also growing as a means of retaining as well as acquiring customers.
Targeted online product offerings will add more personal appeal for different demographic groups. Financial institutions can reap rewards by developing a broad variety of products that can be marketed to different groups based on relevance and financial needs.
Consumers value convenience. Consumers appreciate being able to manage all their finances in one place and in real time. Banks can increase engagement by offering easy-to-use tools to help consumers meet their financial needs. Security remains a main deterrent to internet banking for many customers. Banks must address these concerns and increase trust by continuously improving and strengthening their internet banking security measures.
Financial institutions can build deeper relationships by cross-selling and upselling products. Customers who have multiple accounts with a single financial institution are less likely to switch to another bank. With fewer chances to pitch additional products to customers at branches due to declining foot traffic, banks can use online channels to direct their customers to relevant (and often for the banks more-profitable) products that deepen a customer's commitment to the bank.
Security fears are holding back Internet banking growth and this is having a knock-on effect on mobile phone banking as well, especially because some banking customers see mobile phones as less secure than Internet Banking. As a result, banks are offering their customers free security software and guaranteeing that customer details will be safe online. Many banks send out alerts regarding unusual account activity and offer online security guarantees to cover all or most of customers' funds within specified terms.
The introduction of social media and networking sites, such as Facebook and Twitter, has had a particular impact in offering a community platform and opportunities for customer-bank interaction. Facebook is the world leader in social networking, with over 200 million individual members and a strong foothold in every major market, from 50% of the online population in Switzerland to 80% in Brazil, according to ACNielson.
Banks are offering these tools in an effort to appeal to their customers' financial needs, boost online engagement and build deeper relationships. In March 2011, Citibank announced a beta roll-out of Manila, a free personal account management service that helps securely manage all household accounts, including bills, finances, travel rewards programs and subscriptions, in one place online.
Several banks are providing incentives to steer customers toward internet banking and bill pay, including rewards points, sweepstakes entries and sometimes even cash.
Mobile banking usage in financial services is rapidly expanding. While only a small percentage of consumers currently use mobile banking, this channel is poised for growth with the proliferation of smartphones, apps and mobile web usage. Banks should develop mobile products that help on-the-go customers manage their finances regardless of time and location.
Banks can leverage online channels to market internet banking services. While traditional media, such as direct mail, remains a popular marketing channel for financial institutions, banks should take advantage of online channels to promote internet banking services. For example, ads via email, bank websites and social networks are highly targetable to customers' financial needs and transactional behaviour. Marketing via online channels can increase
customer engagement on the web and encourage use of financial services beyond banking and bill pay.
Most of the major banks have plans to expand into mobile phone banking in 2011. However, there have been some differences in opinion between the banks as to how to do this. Some banks, like Barclays, have chosen to build a specialised mobile phone webpage, which makes internet banking easier than using a normal webpage designed for a large desktop or laptop on your mobile. However, some banks, have designed mobile phone applications that are specially built to access account details online.
Some banks are broadening their mobile product offerings to include apps for mobile phones and tablet devices, remote-capture deposit, photo bill pay and other mobile financial services.
Mobile banking is developing at a fast rate particularly in developing economies. For the increasingly tech-savvy consumer using a combination of these channels to research, purchase and service their financial tools is an unstoppable trend. Given this growing consumer preference it is vital for financial services providers to understand what it is that consumers want from online services.
The global mobile payment market was $10 billion by the end of 2010 and is expected to grow to $63 billion in 2014, growing at a CAGR of 60 percent.
Mobile payment is the most growing segment in the mobile commerce space. Though the revenue contribution from mobile payments to the Mobile Commerce market was around 9 percent in 2009, it is expected to grow to almost 20 percent by 2014.
In developing countries which are underserved by the banking industry, the focus remains on mobile money transfer via SMS. In APAC region some of the countries have low internet penetration, but a comparatively high mobile adoption. This compels the service providers to offer mobile payments services like mobile Point of Sale and mobile ticketing
Both for mobile commerce and mobile payments, APAC leads the market with almost 60 percent in both categories. In APAC, countries like China, Japan and India are driving both mobile commerce and mobile payments market. APAC is followed by EMEA at almost 30 percent for both the markets. In EMEA, Europe is the main contributor and Middle East and Africas is still seen at infancy. Though Middle East is picking up in mobile commerce, it is yet to reach the level of adoption that can found in European and Asian countries. Share of Americas is low at around 10 percent for both the markets
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