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Mobile banking goes global

2013 has been a significant year for mobile banking, BuzzCity’s recent global mobile banking report revealed; in particular a rise in the UnderBanked, an emerging demographic of mobile users who use mobile payment methods instead of traditional banking services, writes Dr KF Lai, CEO of BuzzCity.

The report surveyed 17,000 consumers across 22 countries on their attitudes to mobile banking and payments. It highlighted that that over a quarter of working adults globally now bank with mobile – an incredible figure which looks set to rise as the trend is gathering pace.

Interestingly, both developed and emerging markets are adopting mobile banking methods; perhaps not surprising as the rise in mobile has been exponential, but what is surprising is the fact that people are actually choosing mobile banking instead of traditional banking methods, rather than in addition. The UnderBanked now make up 30% of working adults using mobile.

Who are the Underbanked?

The UnderBanked are not necessarily a high credit risk group. While many (43%) believe they don’t have enough money to open an account, only 8% have a bad credit history. At least a fifth (21%) feel they do not need a bank account probably because banks do not offer services that are important to them, such as small cash loans (50%).

They are connected with exposure to mobile financial services which is fuelling the growth of mobile payments: a higher percentage (19%) use mobile payments for paying bills then those with traditional bank accounts (13%). So mobile is serving a real need to those with no access to traditional banking services.

Phones are the New Banks

Amongst working adults over a quarter (26%) are using their phones for some form of financial or banking transaction, with nearly a fifth (16%) intending to try mobile banking. But it is those without bank accounts, ironically, that are fuelling the growth of mobile payments – a higher percentage than those with bank accounts.

For those that are already ‘mbanking’, balance enquiries (30%), bank transfers (26%) and cash withdrawals (28%), are the top three most-used features. When it comes to non-banking activities, 13% now use their phones to receive their salaries, and 12% pay for goods via their phones.

For everyday purchases for all, cash is still king (73%) but nearly a fifth (16%) are regularly using mobile payments for their everyday purchases fast closing in on the gap on debit and credit cards (23%) illustrating that in such a short space of time mobile payments have become the norm.

When such a large demographic are not only choosing mobile banking but doing so to the exclusion of traditional banking, this not only shows a seismic shift in global consumer confidence, but signifies that there is a real need which today’s global banking services aren’t fulfilling. For the UnderBanked, the mobile phone is not only a communication device, but a tool through with they can independently manage their own finances regardless of their socio-economic backgrounds.

The Future is Mobile

We know that mobile banking is and will continue to be fuelled by the Underbanked, but we predict the next phase of growth for mobile banking and payments will be among those with bank accounts who are not yet using their mobiles for banking (44%).

Once further education amongst potential mobile bankers is implemented and reassurance instilled in the security and safety of mobile banking along with emphasis on speed convenience of third party transactions mobile banking will soon become the norm for traditional bankers.

This was posted in Bdaily's Members' News section by BuzzCity .