Internet today, mobile tomorrow
The recent Finextra article, "Consumers remain resistant to digital banking aspirations" resonated well with what I think about social media, mobile banking, Internet banking and branch banking. But I will not dwell on that; I will instead concentrate on what the research and the article say about mobile banking.
1. Availability of mobile banking does not figure in the top three factors customers consider when moving banks; "good" online banking, local branch, and 24 X 7 access to services do.
2. Only 5% of Germans and 10% of Britons consider mobile banking as one of their most trusted technologies. The top three are: Internet banking, in-branch self service and ATMs. The results for mobile banking are consistently low in all the countries surveyed.
3. Alternate payment systems, such as "Bitcoins" are not popular with customers either.
Customers currently do not regarding mobile or social media as a safe and secure means of communicating with their banks. Time was when Internet banking was similarly viewed, but today most customers have accepted it as being at least as secure as an ATM.
An interesting part of the study is the consumer acceptance of two key technological innovations, namely, the ATM and Internet banking. While the ATM is pretty old, Internet banking is still in its teens. It takes time for customers to accept change and trust in something new. I see that happening with the mobile phone too and related devices, such as the tablet and other connected mobile gadgetry to emerge in the future.
Customers are very concerned about the security of their banking data and extremely wary of banks that are planning to introduce Facebook - or other social media - banking. Most would not like to use their Facebook ID to log in to their Internet or mobile banking accounts. While I see their point, I feel that were my bank to allow my Facebook ID as a factor of secondary authentication, it would be a lot more convenient than the techniques they currently employ. That being said, banks should indeed tread carefully while mixing social media with mobile banking and perhaps not mix them at all, unless and until the security credentials are established.
The popularity of Internet banking, and it being voted among the top three trusted technologies makes me feel that someday customers will also consider accessing bank accounts on a mobile phone as a safe thing to do. Just as customers distrusted Internet banking initially but then acknowledged its convenience and the efforts of banks and regulators to make it safer, so also we shall see signs of that happening with the mobile phone. The reach of the mobile phone is far wider than that of any other channel and with everybody touting it as the next payment device, its security should only improve. Each new generation of mobile phone is safer and as the early adopters start to report better experience with mobile banking, the rest of the population will follow suit. Mobile banking applications are still not that easy to use and have some way to go before customers are impressed with the experience they offer. As a payment device they are even worse, but new players like Affirm (www.Affirm.com) are promising to change that by making payments as simple as "Tap. Tap. Buy".
I am willing to bet that 5 years from now mobile banking will rank among the top three factors to drive customers to switch banks, and also among the top three technologies they trust. Any takers?