These are among the key findings from a report on mobile banking conducted by consulting firm KPMG.
The report, published in July 2015 using primary survey data compiled by UBS Evidence Lab to look at the global mobile banking trends and their impact on banks, notes that adoption rates are highest in so-called developing countries – reaching 60 – 70 per cent in China and India – rather than developed nations, such as the US, Canada and the UK. Another finding is that adoption and growth rates within individual countries show wide variation, even across similar economies.
In its conclusion, the report states that the global mobile banking scene will continue experiencing grow, and at an accelerated rate, in the next 5 years according to a report by consultancy firm KPMG.
The report notes that ‘the banking industry is entering a hugely exciting phase of development but one that will also present major challenges to profitable growth.
“As data from numerous sources make clear, usage of mobile banking services will continue to grow, and at an accelerated rate, over the next five years until they become essential ubiquitous. Additionally, we see the emergence of an era of ‘open banking’, in which financial services become just one layer in a multiplicity of familiar, novel and as yet unconceived consumer experiences,” states the KPMG report in its conclusion.
“In such an environment, we believe banks will face ever greater challenges to their traditional primacy in consumers’ financial dealings. Unencumbered by legacy IT infrastructure, frequently with no aspiration for full banking licenses and often with stronger capital positions and consumer brand trust than the banks themselves, non-traditional players will certainly continue their march across the banks’ turf.”
However, the report notes that many banks have “already begun their response to this challenge with unprecedented investment in mobile and other technology-led capabilities and newer, digitally-enabled branch networks remain a powerful draw for consumers in search of advice at key stages in their lives.”
“For a large group of consumers, banks remain the preferred choice for mobile banking from a security perspective while at the same time perceptions of security weaknesses in this channel are inhibiting adoption for a substantial minority,” adds the report compiled by KPMG’s David Hodgkinson as the Lead Author; Vinkal Chadha as the Lead Researcher; Radhika Todi and Menu Kumar as Research Analysts among other team members.
“From a functional perspective, we believe the coming years will see an explosion in the proliferation of highly innovative re-configurations of banking and other financial services allied to emerging technologies such as augmented reality, wearable technology and contextual services. Well established but still maturing technology trends such as open- standards-based platforms will only serve to underpin the ability of entrepreneurial companies to rapidly develop very high quality consumer experiences with a financial layer. Subject to the aforementioned constraints, we see no reason why traditional banks cannot be just as entrepreneurial as start-up companies,” it sates, adding that “Boldness and commitment will be required to prosper in the ‘Open Banking’ era where the only sure fire winner will be consumers, whose choice and quality of experience will only get better.”