Mobile banking is staging a strong comeback in the United Kingdom, driven by smartphones and other 3G enabled devices which promise a rich user experience. Monitise, the mobile banking specialist, estimates annual mobile banking growth to be a whopping 30%. Mobile remittances are also on an upward trajectory, aiming at £6 billion by 2012.
No wonder, that the U.K. mobile banking space has become quite busy in recent years, with everyone from banks to telecom operators gunning for a share of the business. Broadly, the players have taken one of three different approaches to setting up a mobile banking service – the bank-focused model, the bank-led collaboration model and the non-bank-led model. Barclays’ mobile banking service follows the first approach, Monilink is the colossus of the collaboration model while Payforit has chosen to go down the non-bank-led road.
Although the bank-focused model offers advantages such as more control and branding visibility to the financial institutions concerned, it is not without its challenges. Customers’ primary concerns are to do with the quality of experience, security of identity and transactions, reliability and accessibility of service and extent of personalisation allowed. Banks must address these issues by providing a mobile banking service with an easy to use interface, made secure with the help of multi-factor authentication and other technology, capable of running uninterrupted 365 days a year. As if that wasn’t enough, they have their own apprehensions about setting up the service: Where will they find the technical expertise to run such a complex banking framework? How can they address scalability issues? What will it cost? While most of these concerns can be alleviated by allying with the right partners, others, which are not so easily controlled, could pose greater hurdles. Important among these are how to propose a compelling value proposition to customers and run a successful mobile banking service in a largely unregulated environment.
However, the overriding fact is that mobile banking offers hard to beat growth prospects for banks and other participants. Their success hinges on overcoming its challenges and exploiting its opportunities.