Mobile banking - Evolution or revolution? 27 September 2011

Interest in mobile banking is intense and getting stronger. Smartphones are taking over, new applications are proliferating and banks across Europe are mobilizing to respond to the growing ‘mobile’ opportunity. Most retail bankers, however, remain unclear about how much is hype, and to what extent mobile banking represents a gradual and evolutionary shift or a revolution that will fundamentally change the industry landscape. How aggressively will competitors react? Will mobile create value for the banking sector as a whole, or could it actually reduce profits in some areas? What distinguishes those banks that stand to benefit most from mobile technology? In a recent joint research project with Efma, comprising interviews and survey responses from more than 150 European banks, we shed new light on these and other questions. This article will outline the key conclusions of that research, expand on the nature of the mobile opportunity as we see it and propose what banks should do to capture the opportunity. Our key conclusions can be summarized as follows: • Mobile has the potential to revolutionize the customer experience in personal financial services, with nonbank organizations often leading the way • Banks expect mobile banking to transform the retail banking landscape, but admit that they are not acting or investing accordingly • The unique characteristics of the mobile device present three distinct areas for ‘proposition’ and marketing innovation: ultra convenient banking, digital commerce and the opening up of new markets and segments. • The opportunities will create significant scope for individual players to win (and lose) market share – but the overall impact on banking value creation will be at best neutral. • Banks must shape, lead, or follow the market – they will only succeed if they make a conscious choice on which strategy to pursue and take concrete action accordingly.
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