The world’s in the midst of a mobile revolution, in more ways than one – but New Zealand isn’t just a sheep following the herd. We’re doing things a bit differently.
Here are some global headlines:
· 87 percent of the world’s population have a mobile phone subscription, outnumbering landline subscribers by 5-to-1. That’s 6 billion mobiles! 1.2 billion people use their mobiles to access the internet, outnumbering fixed broadband connections 2-to-1.
· Many of us use only mobile to access the internet, including 25 percent of mobile internet users in the US.
· Sometime in the next 12 to 24 months, depending on who you ask, mobile will overtake desktop web browsing. Mobile usage at Facebook is a bellwether – according to its IPO statement, Facebook “had more than 425 million mobile active users in December 2011”. Whoa!
And here is a somewhat surprising fact: while smartphone sales (primarily iPhones and Androids) are growing quickly and clearly driving some of these trends, ‘feature phone’ sales (think Nokia/Symbian platform) still outnumber smartphone sales by two to one. Put another way, of all the mobile phones sold worldwide in 2011, 94 percent were not iPhones.
So, where does mobile banking fit? Right in the thick of the action. There were an estimated 55 million active mobile financial services users globally in 2009, and that’s expected to increase to 1.1 billion (!) in 2015. Asia, particularly China and India, leads the charge.
There are good reasons for this – customers in these markets can leapfrog the lack of physical banking infrastructure (for branch banking) and lack of decent telco landline services by going mobile. And that’s one of the key drivers of large banks from all over the world – banking the unbanked, or the variation in Western countries – banking the under-banked.
This is reflected in outsized growth rates in mobile banking in developing economies and among those with lower incomes, youth and minorities in the US. The US Federal Reserve has gone as far as stating that mobile is “closing the digital divide”.
We also see it in the banks that are continually mentioned as leaders in the mobile banking space. In addition to Chase bank in the US – who were first to market mobile cheque deposits using the mobile camera – banks often mentioned include La Caixa Bank (Spain) that has its own app store and Bank of China and offers a wide suite of mobile banking tools and notable security features. And earlier this year Westpac NZ got an international nod of approval for its forays into mobile financial services, namely Impulse Saver and Cash Tank.
Here are our top six trends in mobile banking, some of which are just starting to appear here and a few of which we actually expect will never reach New Zealand:
Banks still invest big in iOS.
With iPhones still only accounting for 6 percent of handset sales globally it will be critical for banks with global aspirations to cover their bases with mobile web solutions providing wider platform coverage than iOS.
iPhones and iPads are much more prominent in New Zealand, certainly among young, affluent early adopters. Estimates have that over 60 percent of all handsets sold in New Zealand are smartphones, with iOS devices perhaps nudging out Android for now. Therefore, starting with an iOS mobile app still makes sense in this market.
Mobile banking is shaping a markedly younger customer base for banks.
The drive to ‘bank the unbanked’ is fuelling this trend. This is an important driver in the US market where young, under-banked minority groups are going directly to mobile internet and getting access to banking services for the first time in that channel. It is similarly the key driver in emerging and developing markets. Banks are targeting growth among un-banked populations in India and China and less obvious countries including Kenya.
Near field communications.
Tap and go payments and ‘bump payments’ are becoming commonplace in some countries and just about to emerge here. Large scale roll-outs of tap and go payment solutions for highly transactional environments such as public transport are happening in the UK and Europe. Interestingly, it is not always banks driving this trend, but mobile service providers like O2 in the UK.
There is a similar trend in NZ with the big mobile telcos partnering with electronic transaction company Paymark and others to work on a common solution for secure mobile payments.
Sooner or later, Google Wallet and others are bound to out-muscle or at least significantly change how we use Eftpos, credit cards, loyalty cards and even cash.
New Zealand banks including ANZ, ASB and TSB are staking claims in this territory with mobile-to-mobile payments. Telcos are also scoping this area with solutions for secure mobile payments alongside tap and go payments.
Mobile check deposits.
The ability to cash cheques using the camera on your smartphone is a very clever bridge from ‘old’ to ‘new’ technology, championed by (JP Morgan) Chase in the US. While it has received a lot of attention in the US market, it may have limited appeal elsewhere including in New Zealand.
Card-less ATM withdrawal.
The ability to withdraw cash from your ATM without the need for a card is a growing trend globally and is an important link between the ‘mobile-as-a-wallet’ and actual cash. You can send money mobile-to-mobile that the recipient can easily collect at an ATM.
Kiwibank is the first New Zealand bank announcing that it intends to provide card-less ATM withdrawal services for its mobile banking customers.
Right now New Zealand banks are in a bit of a mobile arms-race. The top six global trends are appearing in this market as well – admittedly in a bit of a ‘gimmicky’ fashion - but there’s no doubt this will change over the next year or so.
Kris Nygren is CEO of Optimal Usability, New Zealand’s leading user experience design consultancy. Optimal Usability has worked with more than 200 of New Zealand’s leading companies and institutions over the past nine years, helping them create world-class user experiences spanning from mobile apps to complex service design.