IDC Reports Future Rapid Growth in Mobile Banking

A report from IDC Financial Insights states that banks need to prepare themselves today for the imminent wave of mobile adoption to avoid being left behind by competitors.
 The study, “Market Analysis: Retail Mobile Banking Vendor Survey Results – Mobile Banking Will Have Its Day, Just Not Today” indicates that while current economic conditions may have curtailed both consumers’ demand for mobile banking and banks’ willingness to invest in it in the short term, things are still moving forward. It presents the results of a survey of 14 U.S. mobile banking solution providers with the objective to get a better understanding of who the key players are in mobile banking, what products and features they offer, and an overall look at industry trends.
“This is the time for banks to invest in their strategies for mobile banking or risk playing rapid catch up once usage does take off,” said Marc DeCastro, research manager, Consumer Banking and Credit/Community Banking, IDC Financial Insights. “Mobile banking for retail customers will become a staple no different than online banking. Just like online banking, the justification for offering a mobile solution will be based on customer retention and cost reduction. The convergence of technologies into the mobile phone will continue to attract customers to the technology, and banks will need to offer a solution.”
IDC Financial Insights believes that payments might just be the “killer” application that propels mobile banking as mainstream. Social networking, while no doubt exploding in popularity, can also be a driver to more success in the future for mobile banking.
In addition, the global economic recovery, which some economists believe has already begun, will likely help kick-start sales of mobile devices and data plans. Therefore, IDC Financial Insights recommends that banks take a more strategic look at mobile banking rather than view it as simply an extension of online banking and bill payment. This includes reviewing the available platforms, listening to the suppliers, and listening to customers before making the investment. Despite the rocky start, mobile banking will be an important channel for retail customers.
For mobile solution providers, IDC Financial Insights warns that it will be important to realise that pricing based on number of users may cause banks to avoid active marketing to keep operational costs lower. In addition, it will be crucial to avoid any shortcuts in securing the mobile channel.
It also recommends that suppliers develop partnerships with carriers and handset providers and prepare for enhanced log-in authentication schemes as regulators rapidly respond to mobile banking.