According to
research by investment bank, UBS,
and accountancy firm, KPMG, mobile
banking usage is expected to be more than double over the next four years, from
800million to 1.8billion people.
Financial
Times said that the increase comes as more people constantly use mobile phones
and seek efficient ways to transfer money. This has increased competition among
established banks, technology giants and digital start-ups as they battle to
capture a larger slice of the nascent market.
Owing to
this development, experts have warn that traditional banks that are busy
maintaining their old technology systems are at risk of losing customers and
revenue to nimble digital firms if they fail to offer efficient mobile banking.
David Hodgkinson of KPMG said: “Banks
must adapt or die. Mobile banking is clearly supplanting all other channels as
the main portal between the bank and the consumer.”
He said although
many banks have already ‘risen to the challenge’ and invested in new infrastructure
and pioneering initiatives, others need to follow suit to keep up with the pace
of change.
Royal Bank
of Scotland experienced its second technology glitch in six weeks on Friday,
leaving customers unable to access their online and mobile accounts. It comes
after a previous systems meltdown in June.
Philip Finch, a researcher at UBS, said traditional banks
now consider mobile banking a priority.
In his own
word: “Three years ago, banks were questioning how
important investing in mobile banking was. Now, everyone is investing in mobile
banking. Board commitment is high, which is necessary to allow banks to invest
in IT. The global financial crisis, regulations, pressure on revenues and the
need to keep costs down has made it tougher for developed market banks.”
Devastating cyber-attacks
are on the rise, putting vast amounts of personal and business data at risk. Financial
Times examines how banks, companies and governments are trying to mount a
concerted fight back against the hackers. So-called challenger banks with new
technology systems are spearheading mobile banking initiatives. Atom Bank, for
example, is set to launch in the coming months in the UK as the first
mobile-focused lender. Certain incumbent banks, such as BBVA in Spain, are at
the fore of digital developments, according to the report.
According to
UBS’s research, security is another issue, deterring one-fifth of consumers who
do not currently use mobile banking. Enticing revenue growth is stoking
competition to win market share of mobile banking.
Bank
management teams expect average revenue growth of 6 per cent over three years,
UBS said. Based on mobile services helping to reduce costs by about 10 per cent
a year by 2018 and 6 per cent boost in retail banking revenues, banks could see
a rise in return on equity of up to 140 basis. (As seen in Punch)
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