In many ways we take mobile communications for granted today such has been the development of the mobile telecoms market and mobile technology. This is an area of business which has attracted billions upon billions of pounds of investment and indeed some of the services which we see today have been decades in the planning stage. There are many buoyant expat markets around the world and we thought it would be interesting to gather the opinion of expats and indeed in this specific example the Canadian expat community.
When you put together perhaps two of the more common practices we will encounter on a daily basis, i.e. telephone communications and banking, you would have thought that the opportunity to combine these two would encourage consumers to use mobile banking services. While it would be wrong to suggest that mobile banking has died a death, before it has even emerged, the reality is that there are still a number of issues which need to be addressed before consumers will take up mobile banking en masse.
Before we take a look at the response from our online poll with regards to mobile banking and its popularity we will take a look at the general mobile banking arena and what it has to offer.
If we take a step back and look at the mobile communications market and the banking market, in relation to expats around the world, these are two very important elements of everyday life. The majority of us will have access to mobile phones and indeed many of us will carry them around with us 24 hours a day seven days a week. This has made the mobile phone the most powerful communication tool ever seen and indeed it has not taken long for many different areas of the business community to recognise this and attempt to put their own stamp on the industry.
The vast majority of expats in Canada, and indeed around the world, will no doubt maintain some form of financial services back in their former homelands and the easiest access point will likely be via landline or mobile-based Internet services. Canada is perhaps one of the more challenging areas of the world with regards to rural coverage although it would be wrong to suggest that the technology in Canada and the quality of coverage has suffered. The Canadian authorities themselves have been very proactive in the area of mobile communications and indeed the Internet is seen by many governments across the globe as the future.
For many people it is the ability to literally be sitting on a bus, train or in a car or perhaps when you have 5 minutes spare time at work to flip open your mobile phone and carry out the regular maintenance of your financial affairs. You can check balances, transfer money or use any of the other services available at the click of a button and while it would be unfair to say this is the finished article in Canada, or indeed anywhere around the world, enormous progress has been made and more will follow.
We will now take a look at the answers from the expat community in Canada with regards to the question, how often do you use your mobile or smartphone for mobile banking?
Yes – frequently (10%)
It may or may not be surprising to learn that the figure of 10% from the Canadian expat community is significantly below the 15.87% for the poll as a whole. This would seem to suggest that the banking community has yet to make a significant dent in the Canadian expat community in relation to mobile banking services. You could possibly argue that mobile coverage and indeed mobile Internet coverage may be subdued in some areas of the country although in reality the vast majority of expats who took part in our online poll are likely to live in one of the major cities or towns – areas where mobile connectivity and Internet connectivity are likely to be fairly strong.
It is surprising to learn that Canada has perhaps one of the least active expat communities in the world with regards to mobile banking especially bearing in mind that the government has certainly been forward thinking and invested significant amounts of money in new technology. Food for thought for the banking community?
Yes – occasionally (3.33%)
The figure of 3.33% is also significantly below that for the overall poll which came in at 10.80% and this will be a disappointment to the Canadian financial arena. In a perfect world you would have hoped for a significant number of occasional mobile banking users so that you could encourage them to move to more frequent usage. This would make the various mobile banking services available today more efficient and more cost-effective. However, the figure of 3.33% for occasional users and just 10% for frequent users does not bode well for the short term?
While there may well be specific reasons why individual markets are experiencing very different penetration rates with regards to mobile banking, it is difficult to put a finger on this particularly low figure. Mobile phones, smartphones and an array of mobile services are now available in Canada and across the world due to the unique delivery service available through the Internet. These figures will be disappointing for many companies involved in this particular area because millions upon millions of pounds have been invested over the years and so far the return appears to be minimal.
There may just be small issues which need to be addressed before we see conversion en masse to mobile banking and we will address these particular problems later in this article.
No – never (86.67%)
The figure of 86.67% does not compare favourably with the 73.33% for the overall poll and would suggest that there is on the surface a problem with mobile banking usage and mobile banking popularity across the expat community in Canada. Canada has an array of very strong banking institutions with a history going back many hundreds of years and indeed many of the world’s largest financial institutions have exposure to the country. Therefore a lack of investment is not really an excuse for the reduced penetration rate for mobile banking so what else should we consider?
There are perhaps many different reasons why mobile banking has not yet taken off in Canada which may include security, reliability and indeed coverage. Canada, perhaps more than many other countries around the world, offers a very challenging geography for mobile phone companies and Internet service providers. In recent years services have been rolled across the country and indeed many of the more populated areas enjoy high-speed mobile Internet and reliable mobile Internet as these services are very important to the local business community.
On the plus side, the figure of 86.67% certainly gives mobile phone companies, Internet service providers and ultimately banking institutions a large group of people “to have a go at”. If they can improve conversion rates to mobile banking this will increase the return on investment for many banking institutions and the mushroom may well start to grow.
The convenience of mobile banking
If you ask an array of people about mobile banking and their opinions on the services available today you will no doubt receive a variety of different answers, plus points and negative points. Issues such as reliability, security and availability will no doubt come to the fore but there is one issue which everybody seems to be agreed upon and that is the convenience of mobile banking.
We are now in an age where we are very often on the go for 24 hours a day seven days a week and finding time to sit down and review your financial affairs is not always easy. The ability to literally bank on the move is a godsend for many people as you can quite literally review your financial affairs on the bus, on the train, in the car or perhaps if you have 5 minutes spare at lunchtime. The ability to do our banking at a time which is convenient for us and a place which is convenient for us should not be taken for granted because in order to arrive where we are today a significant amount of time, effort and money has been invested.
One issue which will come to the fore in years to come is the fact that many of the major financial situations around the world are looking to close their physical branches in favour of telephone banking and mobile banking. This is something which governments and consumer groups have been trying to fight but inevitably there will be fewer physical branches available to the vast majority of us therefore online banking and telephone banking will come to the fore. It will be interesting to see how financial institutions attempt to convert us from off-line banking to mobile banking and indeed how long this will take.
As we touched on above, security is perhaps one of the major issues associated with mobile banking and is perhaps one of the reasons why it has received such a lukewarm welcome from the Canadian expat community. However, are we literally at the beck and call of the mass media with regards to Internet security and are we being given the bigger picture with regards to reliability?
When you take into account the enormous amount of traffic on the World Wide Web today and specifically significant interest in land-based and mobile banking, is security really as bad as many people would have you believe? Security issues probably cover less than 1% of worldwide Internet transactions and Internet traffic but for some reason the worldwide media seem to highlight any individual security issues and security breaches as if they happen on a regular basis. Is this giving the right impression?
The reality is that no Internet connection is ever 100% secure, no physical banking transaction can be 100% secure and indeed no telephone banking service can also claim to be 100% secure. This does not stop many of us from popping down to our local branch to carry out our banking or indeed call telephone banking services, giving private information over the telephone. In some ways there is a growing suspicion that we expect too much from mobile Internet banking, from Internet banking as a whole, and we need to be more realistic. There is also the fact that we ourselves need to take responsibility for protecting confidential usernames and passwords and ensuring that there is no chance of unauthorised access to our mobile phones and smartphones.
In an age where technology is developing and changing so quickly it is sometimes very easy to forget where we are today and where we were last year, 10 years ago, 20 years ago, etc. How many of us remember the 1G network, 2G network and 3G network? How many of us remember the enormous mobile phones which were available when the market opened up to the public? How many of us remember the restricted access to mobile Internet services and indeed the fact that many mobile phones just 10 years ago did not allow Internet connectivity? Perhaps sometimes we need to sit back and appreciate what we have with regards to mobile communications and mobile Internet services and recognise the massive improvements in recent times.
The industry itself will be dominated by the roll-out of 4G mobile applications across Canada in the months and years ahead because this will make a significant difference to the quality, reliability and security associated with mobile banking services and other such operations. It is easy to forget that the 4G network has been in the planning stage for many years now and it is not simply a case of flicking a switch to bring on board a new service. Meticulous planning, enormous investment and significant time has been taken to build this particular service so that it addresses many of the problems and issues which we have seen in years gone by.
If we look at mobile banking in particular, websites have been available for many years now although some of them have been updated to accommodate mobile phones and smartphones. More interestingly, in this world of new technology and new applications a number of prominent banks around the world have launched specific banking apps aimed at the smartphone revolution. Could this be the straw which broke the camel’s back and lead to a significant improvement in conversion rates towards mobile banking?
As we touched on above, the roll-out of the 4G network is perhaps the most important area of the mobile phone industry in the short to medium term. This is a service which has been in the making for many years now and has attracted billions upon billions of pounds of investment around the world. Sometimes we do not give the mobile phone industry the credit which they deserves because services which we take for granted today have often taken decades to put together and significant investment.
There is no doubt that the mobile communications industry is one of the most capital intensive business arenas in the world. Very often mobile phone companies are forced to invest hundreds of millions, if not billions, of pounds into services which may take many years to come to fruition. Indeed in the past we have seen the take up of various new technologies, at huge cost to the telecom companies, only to see them overtaken relatively quickly by new services which effectively killed the previous investment. There are risks in the telecoms industry, there is a need for an eventual return on investment although perhaps more than anything else there is a need to communicate with customers. Is this perhaps one of the reasons why banks have not been able to improve the take up of mobile banking?
The issue of security is one which will not go away, it will be here forever and a day but it is also an area in which we all have a part to play. No Internet connection will ever be 100% secure and if we are honest how many of us have added sufficient security to our mobile phones to reduce the risk of cyber attack or indeed people accessing confidential information?
The take up of mobile banking across the Canadian expat community is very disappointing to say the least. Just over 13% either use mobile banking, via their mobile phone or smartphone, on a frequent or an occasional basis with just under 87% never having accessed this particular service. On one hand it is disappointing but on the other hand it does give the Canadian banking sector, and indeed the world by banking sector, a large number of potential customers to “have a go at”.
It is fairly obvious that the mobile phone, and indeed the smartphone, is the single most powerful communication tool we have ever seen. Financial institutions can literally contact their customers at the press of a button, customers can access their bank accounts anytime anywhere and it is perhaps the convenience factor of mobile banking which will eventually see it succeed. If we take a look back at the most successful services ever created the vast majority are based upon convenience ahead of anything else.
The response from the Canadian expat community, and indeed the worldwide expat community, would seem to indicate there is still a trust factor issue with regards to mobile banking and consumers. The technology is there, the reliability is there and in many ways security has been beefed up as much as possible. It may well be that financial institutions, mobile phone operators and Internet service providers have yet to get the message across in a manner which consumers believe and understand.
Once the trust factor begins to build then we should eventually see a significant increase in the number of conversions from physical banking, telephone banking and land line Internet banking to mobile banking. When this will be is anybody’s guess?