For a many people, particularly in east Asia, the US and Europe, banking has become well and truly mobile. More people than ever before are managing their finances from their smart mobile device; if you don’t already, it’s probably just a matter of time until you start. If you’re a millennial, I’d be very surprised if you haven’t embraced mBanking, as those aged 18 to 34 are more than twice as likely to bank on their phones as the baby boomer generation. With this rise continuing, we’ve picked out three key points you should bear in mind for mBanking.
- A quarter of the world’s population will be banking on mobile in a few years: A recent report from KPMG and UBS has shown how mobile banking usage throughout the world is expected to double in less than four years, meaning that roughly 25% of the world’s population will have a mobile banking account by the end of 2018. This is astounding when you consider how mobile banking only came into being in 1999, as the first ever WAP (Wireless Application Protocol) bank, from Norway, was announced. 1999 also saw the release of the first mobile phone to come with a WAP browser, the Nokia 7110, the successor to the 8110 (the Matrix phone). These early Nokia phones were revolutionary, and heralded the start of the mBanking trend; they were also pretty good for staying in touch with Morpheus, as you’ll see in the video below.
- Growth is fastest in developing countries, but security remains a concern: The KPMG/UBS report has also highlighted how adoption rates are highest in developing countries, such as China, India, and South Korea, where rates are as high as 60%. This is great news for these developing nations; however, there are some concerns as mobile banking security tends to be weaker on these networks. Researchers from the University of Florida have found mobile money systems in Brazil, India, Indonesia, Thailand and the Philippines suffer from issues arising from poor coding of apps, including SSL/TLS issues, botched cryptography, information leakage and opportunities to manipulate transactions and modify financial records. This just goes to show that while the growth of mobile banking is good to see, we must not lose sight of how important secure systems are along the way. In fact, for the past couple of years, security has remained one of the key barriers to wider growth; security concerns and BYOD prevalence in particular has hindered the growth of corporate mobile banking in the past.
- As mBanking grows, traditional banks are in decline: Despite security concerns, the future for mBanking is certainly still bright, unlike the future of traditional branch banking. 1,407 branches in the US closed in 2014. Nearly a third of American consumers report never having stepped foot in a bank branch in the last six months; 58 percent of those under 30 hadn’t been in the last 30 days. Once again, it’s the millennials who are leading the way on this trend.
Mobile banking is clearly going to continue its prevalence, especially as its rise is being fuelled by the young bankers; it’s now only a matter of time before more people are banking on mobile than not. It’ll be 25% of the global population by 2019; could it be 50% by 2030? What do you think? Let us know by tweeting to us @Gemalto.
Want to know more about mobile banking, and what the next generation wants from their bank? Check out our Generation mBanking report which studies youth attitudes to banking and online banking services.