The world of the Internet and the world of mobile/smartphones are intrinsically linked and when you bear in mind the number of people who have access to a mobile phone on a constant basis this is perhaps the most powerful communication tool we have ever seen. As a consequence, many of the everyday services which are used to have now been transferred to the mobile Internet arena but is mobile banking as easy to transfer as general Internet use?
We thought it would be interesting to take a look at the mobile banking arena, to see what is on offer, to see what is being used and indeed to get feedback from expats in the US. We automatically assume that as new technology is rolled out across the world it will be instantly taken up by consumers and businesses but this is not always the case. The initial data from our online poll would seem to suggest that consumers are perhaps a little more reluctant than you might have expected with regards to mobile banking. We will now take a look at the various aspects of this service to see why there is some apathy and why in some areas of the worldwide community there is a distinct lack of interest.
However, before looking at the results from our online poll we will take a look at the mobile banking arena in general.
There are very few people who have access to mobile phones who will not have come across various adverts and various services relating to mobile banking. The very fact that the majority of us will carry around a mobile phone, or indeed a smartphone, every second of every day and very often sleep with our phone by our side makes this one of the most powerful communication tools we have ever seen. It was therefore no surprise to learn that the worldwide banking arena, and in this case the US banking arena, is more than happy to accommodate consumers and businesses who want to “bank online” with new services being rolled out on a regular basis.
The expats arena is one such area of the worldwide community where mobile banking is perhaps more useful when you bear in mind that many expats living in the US will likely still have banking facilities available in their former homelands. When you also take into account the fact that many of us are “on the move” for the vast majority of our working day it is the ability to check your banking services, bank account balances and indeed carry out transactions while perhaps sitting on a bus, train or travelling in the car which is very attractive. In the eyes of many people mobile banking is the way forward, it is the future of personal banking and personal finance although surprisingly at this moment in time it has perhaps not been as successful and as fully utilised as many people had automatically assumed.
We will now take a look at the results from our online poll with regards to expats in the US and how often they use their mobile or smartphone for mobile banking.
Yes – frequently (15.55%)
Those who use their mobile or smartphone for mobile banking on a frequent basis is just under the 15.87% vote for the overall poll. Therefore the US would seem to be roughly in line with the rest of the expat world although it has to be said that this figure, unless you have perhaps looked further into mobile banking, is probably lower than many of us would have expected. Banking associations around the world have invested billions upon billions of pounds in an array of new services, new websites and indeed online banking is for many central to their future. So why has it not been as successful as many had hoped?
Even though this figure is probably lower than many of us would have assumed it is a start and it is a move in the right direction. In many ways it is the trust factor associated with online banking, and particularly mobile banking, which is perhaps holding many people back and reducing the uptake of the services. Whether we need to see some kind of public relations campaign by the banks and mobile phone companies, working in tandem to promote mobile banking, is a matter for debate although this figure should start to increase as the trust factor improves.
Yes – occasionally (15.55%)
The figures relating to those who occasionally use and those who frequently use their mobile phones or smartphones for mobile banking is exactly the same. The figure of 15.55% for “occasional users” is significantly higher than the 10.80% for the overall poll and in time you would expect those occasional users, assuming the trust factor improves, to use these facilities more frequently and moving to the “frequently used” bracket.
This figure would seem to indicate something of a backlog of potential regular users of mobile banking services in America with a trust factor which on the surface would appear to be greater than that in many other countries. Whether you could argue this comes down to cost, availability, reliability of service, etc is debatable but whatever the reason there is certainly a strong move in the US expat community with regards to the embracement of mobile banking. Can other countries learn from this move? Will this trend continue?
No – never (68.90%)
The figure of 68.90% who never use mobile Internet banking facilities is slightly lower than the average for the overall poll which came in at 73.33% but it is still disappointing. When you bear in mind the billions upon billions of pounds which mobile phone companies around the world, and especially in the US, have invested in this particular industry and this particular service, we can only speculate about the minimal return they are receiving at the moment?
One factor which may well assist the embracement of mobile banking services in the future is the fact that more and more banks around the world are closing down branches and encouraging the use of Internet-based banking services and especially mobile Internet-based banking facilities. The reality is that if your bank is no longer accessible on the high street then it is likely you will at some stage move towards online services which are available 24 hours a day seven days a week – at least in principle.
The headlines around the world with regards to mobile Internet use and mobile Internet banking would seem to give a far more encouraging picture than the results of our expat poll. However, progress is being made, investment has been forthcoming and many banks around the world and indeed mobile phone companies have gone past the point of no return. When will they convert this investment into an actual physical return?
The convenience of mobile banking
There are many reasons why mobile banking could become, and probably will become, more popular in the future but the main one is convenience. The vast majority of us are “on the go” 24 hours a day seven days a week and very often we are unable to make time to sit down and look at our financial situation. The ability to literally flick open your mobile phone, log onto your banking services, check balances and carry out transactions at the press of a button, wherever you may be, obviously has major attractions. This has never been an issue with consumers or businesses, this has always been one of the major attractions of mobile Internet banking but there are some issues which need to be addressed before a wholesome take-up of the service.
As we touched on above, the ongoing closure of many bank branches around the world has reduced physical access to banking services dramatically for many people. When you also take into account the fact that many expats in the US will have banking facilities in their former homeland, the online services now available are worth their weight in gold. It is also worth noting that the cost of online services is relatively miniscule as many mobile phone companies will offer mobile Internet services for little or no additional charge.
The fact that the majority of us carry around our mobile phones 24 hours a day seven days a week, have them accessible at any point of the day and are slowly but surely becoming more trusting of mobile Internet services should piggyback the convenience element. If you look back in history, the vast majority of successful technologies and successful services come down to convenience, is mobile banking the next major convenience service to engulf the world?
If you asked a group of people about their particular concerns in relation to mobile banking services the likelihood is that security would be the most prevalent and the most concerning issue. The fact is that an online service can be secure and reliable for 99.99% of the time but that 0.01% when it may be unreliable, unavailable or unsecure is the period which hits the headlines and is focused upon by the media. That is not to say that there are no security issues with regards to mobile Internet banking, because let’s face it many of the land-based Internet banking services have succumbed to cyber attacks and indeed many of them have unfortunately failed for a prolonged period of time. What impression does this give?
The basic impression which many consumers, and indeed expats in the US and around the world, tend to hold is the fact that the mobile banking services are convenient, they are available but perhaps they are not as secure as they could be or as secure as we automatically assume. In many ways this is a public relations issue and something which the mobile telephone companies and the banking institutions of the US, and indeed around the world, need to address sooner rather than later. The sad fact is that without trust it is unlikely that confidence in mobile banking services will improve in the short term, user numbers will pick up or indeed time spent on mobile banking websites will rise.
It would be wrong to suggest that there has been no investment in mobile Internet security over the years but whether this investment has been promoted in the correct manner and whether indeed consumers and businesses are aware of the changes is open to debate.
Over the years we have seen enormous strides made in the area of Internet connectivity and while we take mobile broadband and general mobile Internet services for granted today this has not always been the case. We have seen developments through 1G, 2G, 3G and indeed US mobile phone companies are currently rolling out the latest 4G services. The comparison between the generally available services today, predominantly 3G at this moment in time, and the initial mobile Internet service introduced many years ago is indistinguishable. The reliability factor has increased, speeds have risen dramatically and mobile Internet usage has surged exponentially over the years.
One of the main problems with regards to mobile Internet services and indeed the mobile telecom arena is the fact that it is very capital investment intensive. The services we have today, and the services we will have tomorrow, have taken years and years of planning and years and years of investment behind the scenes. It is not simply a case of flicking a switch and the services are there, it is not simply a case of investing money and the services appear, these are issues which have been ongoing for some time and they have taken meticulous planning.
In recent times we have seen a whole raft of new mobile banking apps released into the public arena, we have seen the take-up of mobile banking services increased dramatically and this is likely to continue in the future. Whether or not we need to see more “joining of the dots” between consumers, mobile telecom companies and banking companies is open to debate because while wireless services are currently available they are nowhere near being utilised as much as they should be. We could be writing about this particular industry next year and it could be indistinguishable from the current services available, such is the speed at which the Internet moves and services are introduced!
As we touched on above, many mobile phone companies across the USA are currently introducing 4G mobile Internet services with super quick Internet speeds, improved reliability and hopefully improved security. In many ways the US market offers a significantly cheaper entry point when compared to the UK and other technologically advanced countries so perhaps we should be looking towards the US as an indicator for the future?
It is also common knowledge that many bank branches around the US, and indeed around the world, have been closed by some of the banking giants to save money. They see telephone banking, Internet banking and mobile Internet banking as the way forward because this allows them to create a relatively low cost basis on which they can base new services. The Internet is most certainly the way forward, the Internet is the most cost-effective way of delivering many services and as soon as we see an improvement in the trust factor and indeed the reliability factor then we should see a significant rise in the usage of mobile banking services.
However, it has to be said that while we are looking towards mobile phone companies and banking companies to improve security and reliability, we also need to play our part as consumers. How many of us hide our bank account details and passwords on our mobile phone? How many of us have actually added a password to our mobile phone to prevent unauthorised access? These are very simple ways in which thieves can gain access to your confidential information and ultimately gain access to your banking facilities. Does this ring a bell?
The figures from the US expat community seem to indicate an average use of mobile banking services on a frequent basis but a higher than average occasional use of the services. This would seem to indicate a growing trust factor in mobile banking services available across the US and when you bear in mind that many expats will retain banking facilities in their former homelands this is likely to become more prominent, assuming security issues and trust factors are addressed.
We often forget about the billions upon billions of pounds which the mobile phone companies, and indeed the banking companies, around the world have invested into Internet services. Perhaps they have been a little slow on the uptake with regards to highlighting security and trust issues with many rumours and counter rumours suggesting we may be at risk of “hacking” if we use our mobile phones for confidential services. The reality is that no Internet connection will ever be 100% secure, we need to play our part in the overall security issue and additional secure factors are being added to the Internet on a constant basis.
There will always be a risk, there will always be reliability and trust factors in the minds of some people but the fact is that the Internet today is in many ways the backbone of the business arena tomorrow. Banks and mobile phone companies have gone past the point of no return with regards to their investment in online banking and they will need to push and push, gain the trust of consumers and eventually we will see usage figures rise significantly. But when will this happen and what will be the catalyst?