Despite the general downturn in the banking industry, new research from TowerGroup finds that 2009 will be a pivotal year for mobile banking as it turns from a niche channel to a mainstream channel for consumer banking. TowerGroup estimates that mobile banking usage will grow from 10 million active users in 2009 to over 53 million active users in 2013, representing a compound annual growth rate of 51.8%.
(Photo: http://www.newscom.com/cgi-bin/prnh/20090526/NY22058 )
As economic concerns prompt consumers to manage their finances more closely, their desire for real-time access to- and control of- their aggregated financial information is increasing the urgency for banks to create a mobile banking channel. More broadly, the proliferation of mobile devices and smart phones symbolizes a pervasive, networked consumer market, revolutionizing many aspects of the consumer lifestyle, including finance. To this end, TowerGroup believes that mobility will be a major disruptive force in the financial services industry.
"Financial services executives understand that mobile banking is a bridge to much more feature-rich, value-added mobile payments solutions," said Charul Vyas, analyst in TowerGroup's Emerging Technologies practice. "The ubiquity of mobile devices, coupled with customers' craving for information on the go, is creating the perfect opportunity for banks to extend the reach of their banking services using the most personal possession for consumers - the mobile phone. At a time when every customer counts, mobile banking is an avenue for banks to reach new audiences and grow their business."
Most mobile banking strategies today are a result of banks' efforts to extend financial services to their existing Internet banking customer base as a next step in the evolution of the self-service business model. As time progresses, mobile banking will flourish and services will continue to evolve, moving beyond basic banking functionality like balance inquiries, location finders and intrabank fund transfers to more sophisticated applications that leverage the rich functionality of mobile devices.
Vendors will continue the battle for market dominance, and the leaders will be those that embrace partnerships, platform integration and a holistic view of mobile financial services. To take advantage of the full potential of the mobile channel, TowerGroup recommends that banks begin now to incorporate mobile banking as a delivery channel with consideration for the following best practices:
-- Leverage other delivery channels to create synergies with the
self-service model and utilize the full spectrum of device capabilities.
-- Develop smart integration models that give banks new segmentation and
personalization capabilities for true one-to-one customer outreach based
on customers' relationship desires.
-- Think outside the bank's customer base to capture new customers
such as current unbanked customers with no bank accounts, ethnic markets
and new generational users, such as the Generation Y segment, which
desires self-service, innovation and paperless electronic transactions
with no need for human interaction.
-- Create tight relationships between mobile banking and ATM vendors to
build stronger ties with customers that currently do not have a
relationship with a bank.
The TowerGroup Research Note Titled, "From Niche Play to Mainstream Delivery Channel: US Mobile Banking Forecast, 2008-13," is available to members of the press for review. To request a copy of this Note, or to arrange an interview with Ms. Vyas, please contact Lisette Kwong at 212-642-7753 or lisette.kwong@edelman.com.
The research report may also be purchased online at the TowerGroup Store via credit card by using this link: http://www.towergroup.com/research/contentpage/page.htm?pageId=4622
About TowerGroup: TowerGroup is the leading research and advisory services firm focused exclusively on the financial services industry. A respected source for trusted information and advice, TowerGroup brings many of the world's leading financial institutions, technology companies, and professional services firms a deeper understanding of the business and technology issues impacting their organizations. Headquartered near Boston in Needham, Massachusetts, and with offices in North America and Europe, TowerGroup serves a global client base. Visit www.towergroup.com for more information.