Mobile Banking: The inevitable evolution
The banking industry has always taken pride in calibrating itself to technology changes. The last half century of technical boom is witness to the willingness of the banking industry to offer its customers better and connected means of controlling their hard earned cash. We saw credit cards being circulated and ATMs being installed in virtually every street corner in the developed and developing world. And this change is quickly entering new dimensions which now involve mobile banking.
In the 1990s there was a spur in online banking which could be done using a laptop or a PC. This sphere then included SMS banking in the early years of the 21st Century which was the first and nascent form of what we today know as mobile banking platform.
But what is the trend that is common amongst all these early inventions and careful calibrations? What motivated the banking sector to be amongst the first to evolve with technology?
The answer to both will be a common goal – The aim of having a cashless and connected economy. The advantage of not having to carry those bundles of cash everytime you go to the supermarket for you weekly shopping is more than evident today. But it wasn’t so when debit and credit cards were first introduced. Like every new system they were too viewed with a note of appreciation coupled with suspicion, revolving mostly around safety and necessity. If you asked someone today why they need a card rather than cash, the answer would much likely be a mockery. It took the banking industry more than a decade to convince its customers that carrying minimal cash while still having quick access to all their money through digitally strapped cards, was indeed the safest and the most convenient way forward.
Mobile banking too is facing a sense of skepticism today. However the reasons are not so much regarding security as much it is about the need to do it. Many argue if it is a solution in need of a problem.
The statistics are the best answer anyone can have. Reportedly in 2009 only 12 million individuals used mobile banking. That number shot up to being nearly 50 Million by 2014. There in 5 years the industry enlarged by nearly 5 folds. This alone shows the rising acceptance of mobile banking.
The platform itself is multi-facet and still vertically expanding its reach. What started as a simple smartphone mobile application to check balance and credit card dues, has now evolved into a virtual bank branch. Today you can do most of the work through your smartphone, which you would either have to run to a branch or grab a laptop for. It includes complex transactions, adding beneficiary account details, setting up new accounts and paying your credit card bills, all in a compact form which requires minimal touch panel strokes.
But vertical growth is not all that the industry is content with. The recent slew of mobile apps which allow shopping from your next meal to your month’s grocery and from an earphone to a 75 inch OLED TV, have all been supported by merchant banking channels. Without the overwhelming support from the banking giants to allow these applications to use their services in accepting payment, cash-on-delivery would have been the only option. And this is a scenario which is still fresh in the minds of many consumers who have witnessed this development in its initial days when your nearest restaurant accepted orders from your iPhone but not payments.
We attribute even the potential rise of NFC enabled mobile payment industry. With Google Wallet and Apple Pay elevating to the global stage in 2014, there is a sense among major industry players that it can bring the next set of evolution to the way consumers interacted with money. The idea that one can walk into a mall with just their smartphone and pay using the same device with a simple wave over a machine, is just too appealing to ignore and so is freedom itself.
Corporate mobile banking truly represents a new way of allowing sellers to interact with their customers. While online banking of the early days successfully managed to change the consumers banking destination from their regular bank branches to their laptops, mobile banking offers to bring in more flexibility and a true sense of “banking on the move”.
At the same time retailers and mobile operators have also played a significant role by changing their business models altogether from a man-power domination to technology and mobility. There are indeed the success lessons that banks should take from the these sectors to ensure similar, high value propositions can be adopted for future expansions, especially NFC-enabled mobile banking which still has its own challenges comings on its way.
Undoubtedly, modern mobile banking systems are evolving to bring about a connection between people and their monetary resources in a quick, accurate and efficient form of delivery. However, true change can come only when consumers at large respond positively and support the transition whole-heartedly which clearly allows themselves to have an upper hand in convenience and puts them in true control of their money.