Mobile: Is the future of finance calling?

Within the background research for this week’s cover feature on banks , some interesting data on the demand for mobile financial services cropped up.

o2 card

O2 marketing director Alistair Johnston told Marketing Week that debating whether his brand launching pre-paid payment cards is simply an extension of the mobile sector, or a meaningful entry into financial services, is a “moot point”. The two things are the same.

His point appears to be backed up by US research company comScore. The firm specialises in measurement in the digital world and has produced an inaugural report into the industry entitled Mobile Financial Services: the Market Today and Opportunities for Tomorrow.

While the data pertains to the US, its results are indicative of a fast-developing area of the mobile sector and can be applied internationally.

It shows that the increasing adoption of smartphones and access to 3G networks, along with the rapid development of mobile applications, have created a fertile environment for the rapid acceleration of mobile banking.

ComScore senior director Marc Trudeau says: “Financial institutions hoping to capitalise on this quickly emerging consumer banking trend need to be ahead of the curve and understand how consumers are using the mobile channel today and how they would like to use it in the future.”

The report indicates that mobile financial services adoption is highly dependent upon device technology and high bandwith (3G) networks. A study of how mobile users access their banking accounts found that mobile web browsing ranked as the most popular method for both smartphone (44.1%) and 3G users (53.3%) followed closely by mobile applications (48.1% of 3G users and 40.6% of smartphone users).

Although PC-based internet banking is a priority for most banking brands, they would be well-advised to invest at a similar rate in mobile. Further insight into usage shows that 31% of mobile financial services users access their accounts primarily from home, even though they have pc-based internet available as well. another 25% conduct transactions when out running errands and 15% whilst commuting.

These figures mirror the world that O2’s Johnston envisages – where the wallet will become irrelevant. Even now, he claims that O2’s research shows if people had to forget something when they left their home, they would rather leave their wallet than their mobile.

The increasingly inventive and useful applications available for devices such as the iPhone are examples of the non-conventional things people can do with their mobiles.

Branchless bank First Direct is developing numerous applications and is already offering an ATM locator and currency converter.

But it is the mobile operators that can be expected to provide the cutting-edge innovation in this area, because as Johnston is quick to acknowledge, the market for voice and text alone is saturated. If those businesses are going to grow, then they need somewhere to go.

The appetite among consumers for ever-more convenient and flexible ways to access and manage their money means that mobile banking is set for significant and rapid growth.

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