Over the last 20 years or so the mobile phone has certainly become the most powerful communication tool of all time with many of us carrying our phones with us 24 hours a day seven days a week. Indeed many of us go to sleep with our phones by our side, wake up with our phone alarm and indeed for many was the first thing we look at in the morning is our mobile phone to see whether there are any messages or alerts. Therefore we thought it would be interesting to take a look at the mobile banking arena and how often expats in Spain use their mobile or smartphones to track their financial affairs.
Before we review this matter in more detail it would be interesting to sit back and consider your own opinion on mobile banking, then take a look at the answers from our online poll to see if you can relate to them. We all know that mobile banking is available, many of us have access to mobile banking 24 hours a day but how many of us actually use this service? There are many issues to take into consideration before mobile banking is seen by many as a viable way of maintaining their financial affairs which we will take a look at in this article.
When you take into account the massive number of expats now living in Spain perhaps this is one of the best markets in which to gain public opinion about the acceptability of mobile banking. Spain is also one of many countries around the world where mobile communications have attracted massive investment from private companies as well as government backed groups. This, together with massive improvements in the quality of mobile communications, handsets and Internet connectivity have certainly brought the mobile banking arena to the forefront of the minds of many people.
The world of expats should give us an interesting look into general opinion on mobile banking because the vast majority of expats who move overseas to countries such as Spain will likely still maintain some form of financial services in their former homelands. Even though many major worldwide banking institutions have branches across the developed world it is often easier to access your banking services via your mobile phone or your smartphone. There are a number of issues to take into consideration including security, reliability and in many ways these factors have not been addressed suitably for many people.
On the flip side of the coin, there is no doubt that mobile phone companies, Internet service providers and bank institutions around the world have invested billions upon billions of pounds into online banking and mobile banking. Countries such as Spain are currently on the verge of the next generation of mobile networks, i.e. 4G, which will deliver superfast Internet connectivity via mobile phones and smartphone handsets. The reality for many mobile phone companies, Internet service providers and indeed financial institutions is that they have passed the point of no return and services such as mobile banking will eventually succeed however much more investment it takes.
We will now take a look at the answers from expats in Spain with regards to the question how often do you use your mobile or smartphone for mobile banking?
Yes – frequently (9.09%)
The figure of 9.09% does not compare favourably to the figure for the overall poll which came in at 15.87% and would seemingly indicate that mobile banking services in Spain are not being utilised as much as you would have expected. This is despite the fact that Spanish telecom companies and indeed the Spanish government have invested enormous amounts of money into mobile communications and mobile Internet but so far it seems to be to no avail.
It is difficult to understand why this figure is so low when you bear in mind that many developed countries such as Australia (26%), United States (15.55%) and even the UK at a disappointing 12.27% would appear to be well ahead of their Spanish counterparts at this moment in time. There is no lack of mobile communication networks across Spain, they do seem to be fairly reliable and companies are investing enormous amounts of money. Is there a missing link? Is there a lack of communication between the mobile phone companies, Internet service providers, financed institutions and consumers? These are questions which will need to be answered.
Yes – occasionally (3.03%)
Again, as you might have expected, the figure of 3.03% relating to those from the expat community in Spain who use their mobiles for banking purposes on an occasional basis is less than the average for the overall poll of 10.80%. This further clarifies the fact that there seems to be some form of missing link, missing service or indeed missing technology to give consumers the confidence to access mobile banking.
When you bear in mind the fact that many of us are on the move 24 hours a day seven days a week and sometimes struggle to find downtime to do our banking, surely mobile banking would be the answer? There is no doubt there is a market out there, millions of people would under the right circumstances use mobile banking services but there would appear to be an issue with regards to reliability and the trust factor in Spain. Even though this is slightly disappointing in the short term there is no doubt that mobile banking will become commonplace across the world, will eventually be one of those activities you do on a regular basis and will ultimately allow many banks across the globe to reduce their excessive cost bases.
No – never (87.88%)
Those who never use mobile banking services across the whole poll came in at 73.33% although the figure from Spain does not compare favourably at 87.88%. The technology is there, the service is there, the networks are there but something is missing. Historically new technology such as the Internet, mobile communications and in this particular instance mobile banking can and has taken many years to take off. Are we currently at a point at which consumers will be more trusting and use mobile banking more in the future?
On the flip side of the coin, despite the fact that those who use mobile banking on a frequent and an occasional basis only adds up to around 12% of expats from Spain who took part in our poll, it does give a significant unconverted market share for the banking community to target. If mobile phone companies, Internet service providers and financial institutions can work together in the future there is the potential to increase usage figures enormously which will filter down to the bottom line of many banking institutions and improve their profitability.
It is interesting to see that while access to mobile banking websites has been available for some time a number of major worldwide banking institutions have only just introduced various specific apps for new smartphones. Is this the way forward? Will this turn the tide?
The convenience of mobile banking
As we touched on above, the speed of life continues to increase and many of us are on call 24 hours a day seven days a week despite the fact that predictions in the past suggested that the Internet would give us more leisure time and more free time. Whether it is the ongoing economic situation around the world, something which is very relevant to the Spanish economy, is a matter for debate but there seems to be less and less time for relaxation and leisure. Therefore you would have expected that the flurry of mobile banking services introduced over the last few years, as well as the vast array of banking apps, would have converted more people within the expat community in Spain to the benefits of mobile banking?
We must also take into consideration the fact that are many major financial institutions around the world are looking to close as many local branches as possible which should push more people towards online banking and then onto mobile banking. There are a number of factors coming together which will focus the eyes of many consumers on mobile banking, will increase usage but at this point in time there seems to be a missing link in the chain between financial institutions and underlying customers.
If you take but the briefest of looks back at technology in the past you will see that the vast majority of highly successful services have been born out of convenience. Very often these are services and technologies which replace physical actions, mean that we do not have to visit physical locations on a regular basis and allow us to carry out various actions in our own time and our own space. On this basis it is difficult to see how mobile banking will not become more popular amongst the Spanish expat community, a community where many people still maintain banking services in their former homelands which they cannot ordinarily use 24 hours a day seven days a week on a physical basis or by telephone.
There are many reasons why perhaps mobile banking is not as popular today as you might have expected and if you asked a group of people for their opinions they would come back with a variety of different answers. However, it is likely that one factor would take precedence over everything else and that is security!
For some reason there is an underlying suggestion that mobile banking is highly risky with the potential to be hacked by cyber criminals who will steal your usernames, passwords and all of your money! While there are security issues to take into consideration, some relating to consumers and some relating to businesses, the fact is that no Internet connection, whether land-based or mobile based, is ever 100% secure. Indeed a visit to your local bank branch or even telephone banking services are not 100% secure and are sometimes open to rogue operators who may well operate with criminal gangs. But why do we focus on mobile Internet banking as the more risky service?
The vast majority of us will at some point have come across headlines in the mass media suggesting companies have been hacked, private data has been stolen and some websites have been compromised. Despite the impression given by the worldwide media, these instances are still very few and far between and when you take into account the massive traffic around the World Wide Web these security issues will account for less than 1% of overall transactions and overall traffic. However, they seem to be headline news, they seem to sway the opinion of consumers and in some ways the business arena is not fighting back with promotional campaigns and public relations operations.
Security is an issue, it is a valid point, but let’s not get to a situation where mobile Internet is seen as the most dangerous of banking services available today. There are risks associated with any transaction, whether physical, over the telephone or virtual.
It is very easy to look at the mobile phones of today and the smartphones seemingly being released on a regular basis and forget about the developments, major developments, which have occurred over the last 10 years, 20 years or 30 years. How many of us remember 1G, 2G or 3G mobile phone networks? How many of us remember the massive handsets which were introduced when the mobile phone phenomenon began? How many of us remember the fact that mobile phones only 10 years ago would have limited or no access to mobile broadband? Yes, it is very easy to take current technology for granted but major strides have been made and more are in the pipeline.
In many ways the mobile Internet market, and as a by product the mobile financial services market, can be compared to a swan which is very graceful above the water but kicking its feet vigorously below the water. The services we see today in the mobile telecoms arena have been in the planning stage for many years and it has to be said that this particular arena is one of the most capital intensive investment markets in the world. It very often takes a significant investment in the hundreds of millions or potentially billions of pounds to build a service which may not come to fruition for up to a decade.
There have been developments in security, reliability and indeed the trust factor between mobile phone companies, Internet service providers and the banking institutions has improved. However, perhaps some of us as customers need to take on board some of our own obligations with regards to security? How many of us store our banking usernames and passwords on our mobile phone? How many of us have added passwords to secure areas of our smartphones?
The future at this moment in time with regards to the mobile communications industry, and as a consequence the mobile banking industry, is dominated by the introduction of the 4G network across Spain. Indeed despite the fact that the take-up of mobile banking services at this moment in time is well below that of many other developed countries it seems, on the surface, that the Spanish mobile phone industry is one of the more efficient and as a consequence has wasted less investment compared to their counterparts in other areas of the world.
The roll-out of the 4G network is currently ongoing and will obviously start in some of the major cities and towns of Spain and then be rolled out into some of the more rural areas. This will offer much improved Internet connectivity, much improved speeds and hopefully it will also improve the security issue which clouds the minds of many consumers. Despite the fact that we are sometimes led to expect too much, the fact is that no Internet connection will ever be 100% secure and both consumers and businesses need to take this into account and do as much as possible to prevent cyber attacks and other security lapses.
Billions upon billions of pounds have been invested in the worldwide mobile communications industry, banks have invested significant amounts of money in their mobile banking services and whether we like it or not, mobile banking will become more commonplace and more popular in the future.
When you bear in mind the number of expats living in Spain this particular element of our overall online poll perhaps gives us some real food for thought. The reduced take-up of those who use banking services on a frequent basis and an occasional basis will surprise many people although it does leave an enormous part of the potential mobile banking sector for the mobile phone companies, Internet service providers and financial institutions to “have a go at”.
There are potentially a number of reasons why the take-up in Spain is significantly below that for the overall poll which includes the trust factor, security, reliability and perhaps a lack of information from financial institutions directed at people looking to use their services. There is a growing opinion that many financial institutions have “missed a trick” by not communicating enough information on a regular basis to potential mobile banking customers. This is something which will likely be rectified in the short to medium term because many banks have invested serious amounts of money into this area of their services. Put simply, they cannot afford mobile banking to fail!
As a final note, as we suggested above, very often we automatically assume that any one service should be 100% secure when in reality it is never possible. We see issues with physical banking services, we see issues with telephone banking services so why do we automatically expect mobile banking services to be 100% secure? We all need to play a role in securing mobile banking services, utilising them to their full capacity and ensuring that our data remains confidential. We also need to see more co-operation between mobile phone companies, Internet service providers, financial institutions and consumers to ensure that they are all singing from the same hymn sheet.