Mobile Banking
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Mobile Banking
Mobile Financial Services (MFS) are showing signs of a promising future. From about 10 million people at the end of 2007, it is envisioned that more than 1.4 billion people worldwide will benefit from mobile financial services in 2015 by using mobile wallets – software that enables consumer to manage their money, including making and receiving payments, using their mobile phone – according to research by Edgar Dunn, a specialist mobile banking and payments consultancy firm in partnership with the GSMA.
Juniper Research predicts over 612 million mobile phone users will generate more than $587 billion worth of financial transactions by 2011 and that more than 100 million mobile users worldwide will be making international money transfers by 2013.
Additionally, the results of a web-based survey by Compass Intelligence showed an estimated 7.2 percent of mobile phone users who are employed, and 18 years of age and older, use mobile banking. Stephanie Atkinson, Managing Partner of Compass Intelligence noted that, “the growth in smartphone adoption is expected to be a leading factor in the future adoption of mobile banking.” With the rapid growth of smartphone adoption, mobile-banking becomes easier and more user-friendly because devices, especially newer models, have a resemblance to the look and feel of computers. One example of HSPA delivery of mobile banking is Australia’s Telstra and the National Australia Bank (NAB) which joined to offer 3G HSPA technology based mobile ATMs (cash machines) at temporary venues. The ATMs will be deployed at major sports and cultural events across Australia to provide convenient access to cash for the public.
The mobile banking end game will be about much more than checking balances and paying bills. It will evolve into a mobile wallet, allowing banks to generate greater electronic payment volume through the combination of electronic loyalty programs, mobile marketing, and contactless payments. Juniper Research reports that financial institutions are delivering an increasing variety of products in the mobile environment, from fund transfers, bill payment and presentation to account management and customer service. As a result, the annual number of global mobile banking transactions is forecast to rise from 2.7 billion in 2007 to 37 billion by 2011, as a greater number of services are deployed worldwide. Juniper expects the number of consumers accessing banking services on their mobile phones to increase tenfold over the next four years, reaching 816 million by 2011.
Ovum forecasts that the mobile payment market (m-payment) will grow from $12 billion in 2007 to around $150 billion in 2012. Most of the current market originates in Japan, where mobile contactless payment and online shopping services are already well advanced. Three segments of mobile payment are also forecast by Ovum: 1) Mobile contactless payments are expected to grow from $3 billion in 2007 to $52 billion in 2012. This market mainly lies in Japan, North America, Western Europe as well as a few developed Asia-Pacific countries; 2) Online shopping is expected to grow from $8 billion in 2007 to $41 billion in 2012. It is anticipated that as the Internet becomes mobile with a new generation of mobile devices and Internet access tariffs, a growing share of the business-to-consumer e-commerce market will take place on mobiles; 3) The money transfers sector is expected to grow from $1 billion in 2007 to $58 billion in 2012. This market opportunity lies mainly in developing countries.
Handsets can now be used to buy online, via “swipe” points in retail outlets using Near Field Communication (NFC) technology and mobile-to-mobile purchase. However, the phone can be used as more than a banking tool – it can serve as the location for the account, hold all the financial information and be used as the primary security measure. User adoption of mobile banking, in the form of remittance, money transfers, bill payments, commerce and financial transactions is on the rise with the help of driving forces from financial and credit communities, software providers, e-commerce companies, device manufacturers and mobile network operators. Research conducted by MQA Research and commissioned by Fiserv shows that 75 percent of consumers surveyed in April 2008, were willing to conduct mobile banking, a 26 percent increase from two years prior.
According to a study by Gartner, mobile payments are expected to grow to 103.9 million in 2011. Gartner defines mobile payment as paying for a product or service using mobile technologies, such as Short Message Service (SMS), Wireless Application Protocol (WAP), Unstructured Supplementary Service Data (USSD) and NFC. The payment is made via the phone, although not necessarily over a wireless network, as in the case of NFC.
SMS is the dominant mobile payment technology today, driven by mobile money transfers, and it will remain the dominant technology through 2011 according to Gartner (Gartner excluded telebanking or using a mobile phone to call the service center, as well as mobile ticketing where the ticket value has been prepaid and is stored on the phone).
The GSM-HSPA evolutionary family offers many differentiating factors associated with application security and trust for mobile banking or e-commerce, making these access technologies the clear leader in the mobile industry. The devices and network infrastructure implemented in today’s networks give them a considerable advantage over competing technologies, and place these operators at the leading edge of trusted mobile application offers.
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