FICO has released research into consumer opinion on mobile banking by region, identifying how consumer attitudes towards to the fast growing channel differ around with world. Billy Bambrough examines the results of the report and explores what they mean for the future of mobile banking
The smartphone market has grown at a phenomenal rate around the world with FICO predicting that sales of smartphones will very soon eclipse sales of "dumb" feature phones.
To better understand how people use their mobiles for banking FICO has identified five key smartphone user segments:
– Mobile-natives – Are fully immersed in the mobile experience;– App shoppers & bankers – Have a similar attitude to mobile as natives but are not so dependent on the technology;– M:webs – mobile web users rather than app users. They are open to doing more through their mobile, but less so than some other segments;– Mobile-intenders – currently have a low level of mobile interaction with businesses but are keen to broaden this in the future and are attracted by new ways of using mobile, and– ABC-mobiles – do not currently interact heavily via mobile and are measured in their desire to do so in the future.
Gabe Hopkins, senior director of product management at FICO, tells RBI: "There are large variations between the different countries that FICO looked at for this survey. We can put a lot of this down to differences in how smartphones are used in different economies."
According to the report the way that consumers interact with banks has already dramatically changed in recent years. Consumers have shifted from physically visiting a branch towards managing their bank accounts online.
Over 50% of consumers now consider online to be their preferred channel for checking their accounts, transferring money and making payments.
All signs suggest that as mobile technology develops, it will also become a central part of banking for consumers.
The results showed that of smartphone users, 17% already consider using apps as their favoured means of checking their account balance.
Many banks have already adopted mobile technology solutions and have capitalized on a surge in take-up. However, there are further opportunities to exploit.
Hopkins says: "While in the UK and other early adopter countries, people have smartphones now who don’t use them to their full capacity where as in many emerging economies you are less likely to have a smartphone unless you want to use all of the features it provides.
"You can see this in the survey results. Countries with lower smartphone adoption report a far higher percentage of smartphone users taking full advantage of apps like mobile banking."
When receiving bank-initiated communications, email and text messages are the most popular channels for most interactions.
The popularity of text messages which, from a user’s perspective, are not dissimilar to push messages, suggests that there is considerable room for growth through this emerging channel.
Hopkins says: "The mobile channel is set to continue in its growth. The younger generation is fully onboard with the mobile experience, seeing it as far more convenient that using a traditional PC or laptop.
"The channel’s growth has a way to go before we’ll see it plateau off and to me it’s entirely conceivable that mobile will be used as often as online."
"We have not included Africa in the research, which would have had an effect in the final results."
One key advantage of mobile is the ability to integrate several channels, for instance email, push-messages and phone calls, into a single mobile solution, which will provide further value to customers.
"Banks will see 25-45% of people expecting to be have access to this channel and have a good experience."
"Ratings on the App Store and Google Play will have a large effect on the bank that people choose. The mobile banking experience is poised to become the key factor in deciding which bank to use."
Over three quarters of smartphone users are keen to do more of at least one type of banking interaction through mobile in the future. The most popular, among that segment, include checking account balances (75%), and receiving security checks / fraud notifications (59%).
For the report FICO tested several more specific mobile banking propositions with consumers, including app-based suspicious transaction alerts, bill alerts, bill payment functionality and automatic international payment verification.
Each was well received by consumers; however, the most popular was functionality that alerts users of suspicious activity on their account.
Stuart Wells, CTO at FICO says: "We are very excited by the results in the study as they reinforce the need for banks to communicate more effectively with consumers.
"I’ve seen firsthand how organizations use FICO’s automated customer communication tools to transform their businesses – reducing costs and risks while deepening customer relationships."
It should be noted that FICO did not include Africa in the survey, which Hopkins admits would have had "an effect on the final results."