Generally speaking, mBanking will experience steady growth over the next two years, before seeing an explosion in 2013. However, the position will vary from one geography to another – surprisingly, Europe is lagging behind the US. Elsewhere, India is an example of a country where mBanking is still growing, and has significant potential. In India, banks started rolling out solutions over the past two or three years, with 500,000 mBanking users – for India, this is a small number. The State Bank of India has 110m customers, of which 4m are online. Being an emerging market, India was expected to embrace mBanking faster, with customers going straight to mobile and not online banking.
The market for mBanking has grown enormously in recent years, but the main factor currently holding further growth back is the learning curve of the user. Many consumers are still not used to using their phones for something that isn’t a phone call. Things are now changing, however. The evolution of the Apple App Store, for example, has brought a paradigm shift whereby consumers use their phones for many different functions.
The key thing is getting consumers to trial mBanking functions on their phones. Experience shows that once they’ve used a form of technology, there is no going back. To win the trust of consumers, there needs to be a real focus on the key factors of convenience, accessibility, simplicity and ease of use. The evolution of smartphones is persuading even the most sceptical to try mBanking. Improvement in the actual devices is a real help. Apple led the way in this respect but now Google’s Android is breaking ground much quicker and is allowing a high-level user interface.
Sophisticated security measures are already in place in the mBanking space. Encryption systems are in place, the main issue is if you lose your mobile phone. In addition, the sums being transferred are quite small, making the possibility of large scale global fraud less likely. The key focus now needs to be on changing customer perceptions. We believe that this will come with natural progression in the way that online banking is now seen to be a secure and safe way of allowing customers to manage their bank accounts.
Marco Casartelli is CEO at Vipera