The Rise Of Mobile Banking
Posted by Andrea Baker on
Mobile banking is changing the world of business with forecasters across the globe anticipating an explosion of usage in the coming years. The trend is being driven by innovation, apps and emerging technology. But what does this mean for business and retailers?
According to a recent report by fintech analysts Jupiter Research, mobile phone users accessing mobile banking will reach 2 billion globally by 2021, that's up from 1.2bn this year. The astounding figure means one in three adults will soon access their bank accounts via mobile device.
Australia has traditionally been among the world's fastest adopters of mobile banking and that trend looks likely to continue with CEO of the NAB Andrew Thorburn noting last year their “busiest branch is a mobile phone”.
A 2014 survey by renowned management and consulting organisation Bain and Company also indicated 38% of Australian banking interactions were via smartphone or tablet, and that figure has only increased in the past two years.
As a nation of mobile users keen to embrace technology we're also likely to be one of the first economies to go cashless, with Westpac tipping that could be as soon as 2022.
The Financial Review reiterated this sentiment, stating the push towards a cashless society had reached a tipping point. They continued Reserve Bank data indicated cash transactions had plunged by more than a third between 2007 and 2013, while cash withdrawals also dropped by 5.5% in 2015.
Not surprisingly credit and debit card payments surged by 57% between 2010 and 2015, while mobile payments via bank apps has also reduced the need for cash.
This movement away from cash to mobile payments is backed not only by banks keen to introduce their own apps and cashless payment systems, but fintech disrupters such as PayPal, Apple Pay and Android Pay, who are also clamouring to get in on the action.
For banks this presents a challenge of staying one step ahead of the game to ensure they retain customers and the lucrative translation fees.
So far Australia's big four are holding their own with Bpay stating: "In Australia, more than one in two transactions under $100 are made using contactless technology, often with Visa PayWave or MasterCard PayPass and used to pay for everyday lower value items or groceries."
They surmise this is due to banks and major retailers backing and actively embracing the trend.
"In the last four years, Australia has seen the arrival of banking apps for wearable devices, payment authentication via fingerprints and cardless cash."
For business and retail
Mobile banking offers business and retail innovative solutions and streamlined processes on a number of fronts.
The first is newfound abilities for a business to track its own expenditure, pay bills and automatically deduct expenses, all from the palm of your hand anywhere in the world.
Mobile banking apps allow better cash management in the form of record management, immediate alerts and account updates which can be accessed readily and in real time.
The second and perhaps more profound impact is on customer payments. The days of a quick cash job could soon be gone, with customers becoming increasingly comfortable with the idea of paying for a coffee, grocery shopping or making a major purchases simply using their mobile phone.
As a result the mobile point of sale systems and payment processing solutions that can accept contactless payments are the way forward for retailers and service businesses alike.
Australia's major retailers were among the first to install contactless payment terminals, while smaller retailers enjoy the ease of use and ready access to facilities, and service providers like taxi companies enjoy the convenience.
Globally payment processing tech co's like PayPal and Square have been at the forefront of the cashless and contactless push, Australia's big banks have led the way nationally, and as a result have enabled small retailers, startups and stall holders access to the latest payment technology and ultimate customer convenience.
The last word
How soon Australia truly becomes cashless remains to be seen, but undoubtedly mobile banking access is only set to increase as the banks finely tune and roll out more advanced apps, and further contactless capability.
Now, it's down to business and retailers to ensure they're aboard this oh so rapid ride.