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The number of mobile banking users globally is forecasted to double to1.8 billion, over 25% of the world's population, in the next four years, according to research by KPMG using primary survey data supplied by UBS Evidence Lab.
TheGlobal Mobile Banking Report stated that mobile banking users inIndia account for over 50% of its population at present.
The report also said that while the mobile is already the largest banking channel by volume of transactions, its adoption by new customers isnow entering an exceptionally rapid phase.
Interestingly, adoption rates are highest in developing countries: reaching to about a 60-70% in India and China, rather than developed nations such asthe USA, Canada and the UK. It also suggests that mobile banking and payment systems are increasingly being integrated with other technologies, driving an era of 'Open Banking'.
The report warns that banks who do not have clear mobile banking strategies may lose customers and cross-sell opportunities in the short-term, as well as risk jeopardising competitive advantage.
Akhilesh Tuteja, Partner and Head of IT Advisory services at KPMG inIndia, said, "The differentiation in mobile banking has been adifficult area and sustained differentiation is almost impossible. Many banks are adopting 'Mobile First' strategy, which provides arelatively better competitive advantage."
In the short-term, the availability of mobile banking services is a key indicator when consumers choose to switch banks; and the report highlights a clear link between a strong mobile proposition, customer satisfaction and advocacy. However, mobile bank users, who aretypically in their mid to late thirties, are among the most likely to switch banks, suggesting that even an effective mobile banking offering may not be enough by itself to retain these high value customers.
Indian customers demonstrate the highest likelihood of changing banks driven by the availability of better mobile banking services.
In the long-term, the report suggests that as mobile banking technologyis driving an area of 'Open Banking', where consumers can bank within context, across a variety of channels, operating systems anddevices, including phones, tablets and wearables.
Banks find themselves having to both protect the customer, while at the same time providing uninterrupted and speedy access to their servicesto attempt to ensure greater consumer satisfaction.
Biometric apps and finger print scanning are earmarked as ways to bolster the security of mobile banking, whilst ensuring ease of access; only ahandful of the main banks assessed in the research currently offerthis service.
Tuteja further analyses the impact of these data findings for India, saying, "Customer experience and frictionless engagement will likely remaina key driver for mobile banking adoption. What we have witnessed sofar is possibly just a tip of the iceberg. With increasing deviceintimacy and the convergence of interaction channels, we could seecompletely transformed customer engagement models. Also, the banksmay further universalise the services portfolio beyond core bankingservices. The pervasive adoption of wearables and augmented realitycould create unimaginable possibilities to drive frictionlessinteraction."
