Mobile phones could potentially become the preferred medium for banking services across the globe. Moreover, the industry has also witnessed significant improvements in support, network availability and data speed. These have made banks use mobile banking as part of their multichannel strategies.
It is a foregone conclusion that any new technology gains popularity in developed countries before coming to the emerging markets. In the case of mobile banking technology, it is the emerging countries that are leading the way. Europe and the US have an all-time high mobile and internet penetration. However, for people in these markets, mobile banking has become a supplement to online banking. In emerging countries, even individuals who do not have access to traditional banking channels and the internet have a mobile phone. It is among these people that mobile banking is becoming the preferred banking channel.
By now, there are different possibilities to make mobile payments: via bank account or debit card, credit card, or telecommunication company billing. The mobile industry and financial sector are aware that using mobile phones to buy goods and services is becoming very popular. Increases to limits by banks and vendors also demonstrate confidence in the suitability of the mobile channel for greater spending. This will generate new revenue channels for high-volume mobile money applications.
The pressure to offer mobile money services on mobile phones is increasing. Different stakeholders are working together to make mobile payments a commercial success. “The banks that will win customer loyalty will be those with the technologies needed to deliver world-class financial services over mobile devices,” Noel Gordon, GM director of Accenture’s banking practice.
However, there are still different cultural, business and technical challenges affecting the growth of mobile banking in developing and developed countries. Financial institutions will have to create awareness and achieve full engagement of the customers to ensure sustained growth in this segment.