Market Insight

Mobile Banking: The Second Wave Global Mobile Banking Survey 2008

by Diarmuid Mallon, Senior Product Marketing Manager, mCommerce

For those of you keeping a close eye on our recent press releases, or if you have been reading the Sybase blogs, you will have noticed references to our latest mobile banking survey.

Up until now we have only been able to share a few snippets of the survey, as we have been busily analyzing and compiling our 2008 mobile banking report. However, we are now able to give you greater insight.

In 2007, we ran our first mobile banking report which focused on how consumers interacted with their banks across traditional and new channels–particular their appetite for mobile bank services. For this year's report we wanted to provide a view into the banks plan for exploiting the mobile channel, giving a very much peer–based view of the market.

Using data resulting from interviews with some the world's largest financial organizations as well as a representative sample of national and specialist financial institutions, the new survey provides a view of mobile banking sentiments and trends. We spoke in depth to nearly 100 banks across the Americas, Europe and Asia, giving both, a regional and global view.

Themes

A number of themes became clear from the survey: increasing the focus on the mobile channel, customer acquisition, and the need for consumer education and learning from the experiences of first movers.

Service Provision to Double

There will be big changes in the mobile banking landscape over the next two years, with service provisions set to double. Globally, 34% of banks currently offer mobile banking and another 32% are planning to launch services within the next 12–24 months.

This growth spurt is even more marked in the US. Today, only 10% have some form of mobile banking products, but a massive 57% plan to add mobile services within the next 12–24 months. That means by 2010, the US will have caught up with Asia and Europe in terms of mobile services offered.

We will be seeing mobile banking going from a minority (or even niche) product into the mainstream. Banks and financial institutions that don't plan to add any services will face a marketplace where the majority of their competitors are offering mobile services.

Customer Acquisition

What is driving this ambitious growth? The reasons vary from bank–to–bank, but again, some common themes were seen.

Forty-five percent of banks identify mobile services as a way to encourage customers to switch to a new bank. Having done a consumer focused survey in 2007; we were in a position to compare the potential of mobile banking in aiding to switch customers by looking at the banks' estimates and feedback from consumers.

What we see is a large gap between banks estimates and the consumers' response. Banks thought, on average, that 5% of consumers would switch for mobile banking services, whilst in our previous survey we saw that actually 25% would switch. It looks like banks are underestimating the power of mobile banking services to attract new customers.

Another theme that is clear is that late-comers are looking to learn from the experiences of the early adopters. We are seeing that banks are looking for better integration of mobile and online services and improving CRM by better exploiting mobile data.

Consumer Education

Consumer education is one of the issues that needs to be tackled in growing the usage of mobile banking services. Forty–five percent of the banks identify the lack of awareness about service(s) as being a limiting factor in mobile banking usage. This mirrored results from the 2007 survey, where on average 50% of consumers did not know if their bank offered mobile services.

Summary

This is just a snapshot of a few of the findings from the 2008 survey. Banks are telling us that mobile banking service provision is set to double over the next two years, and for existing services there is still growth potential as banks address limiting factors, such as customer awareness. Finally, our survey shows that banks are planning to integrate mobile services into their multi–channel strategy and use it as a way to get closer to their customers.

If you would like a copy of any of the mobile banking reports or information on our mobile banking products, please contact your Sybase 365 account manager. A downloadable version of our survey report can be obtained from: http://www.sybase.com/365

The Sybase blogs can be found at: http://blog.sybase.com