The precise reasons for this indifference are not clear, but it may be that people with regular access to desktop computers would rather bank from there. “It is probably a mistake to view mobiles as a separate silo from broader internet banking, they are essentially the same thing offered on a different device,” says KF Lai, chief executive at Buzzcity.
Lai believes some banks might have reservations about pushing mobile banking too hard if they feel it undermines the value of their existing brand. Banks with strong brand associations with trust and stability might feel mobile banking is too young or “fun” for them and will alienate their existing clients, he says.
This may be a bigger issue in some markets than others. In Thailand, Kasikorn Thai Bank was cited as the leading bank for mobile banking by 24% of Thai respondents; it specifically targets urban professionals and young people, says Lai. In fourth place was Krungsri Bank with only 7% of respondents; its clientèle are typically older businessmen.
David Hodgkinson, head of digital and mobile in the customer and growth practice at KPMG, sees no evidence of similar concerns among banks in Europe. But he says banks will look at their customer profiles to assess whether or not an investment in their mobile platforms is likely to be worthwhile.
“It’s a question of priority and apportionment across the channel mix being matched to the needs and wants of a bank’s current and target customer base,” says Hodgkinson. “It is not true to say that older people favour the branch, while younger favour web and mobile. The biggest users of digital and mobile are actually affluent 34-50 year olds, which is believed to reflect their greater confidence in financial self service.”
Interestingly, in markets such as South Africa and Thailand, Buzzcity also found older mobile phone users were more likely than younger people to find mobile banking easy and useful.
However, overall there does not appear to be an age bias among those who do not need mobile banking, says Lai. There is a small skew towards younger generations in terms of mobile banking uptake, which he puts down to the ease of using particular mobile devices: the larger, cheaper and more intuitive the device, the more likely older people will use them. It may therefore be that the advent of tablets has done more for mobile banking than any other single factor, such as improvements in security.
Some banks are hesitating before investing heavily in mobile banking if they feel it is unlikely to reach many new customers or will only cannibalise their existing internet banking services, says Hodgkinson, especially as it increases costs by requiring the maintenance of two systems.
This cost can be offset by the increased engagement of mobile bankers, who tend to login more frequently, though banks have not found an effective way to cash in on this yet, says Hodgkinson. Customers accessing bank services via mobile tend to do so for a specific purpose, and it is harder to sell other products via phone than it is on the internet, he says.
One Buzzcity finding that will please the industry is that customers are less concerned about security issues than they were, with only 19% of those surveyed citing this as a reason not to bank via their mobiles, down from 34% in 2013.
This is helping fuel further growth in mobile banking, for now at least, with 31% of adults who use the internet on their mobiles describing mobile banking as “easy and useful,” up from 26% last year.
Other end of the spectrum
Yet this still leaves a large proportion of users who do not think it is easy and useful. At the other end of the spectrum, 11% of respondents feel mobile banking is too complicated or unreliable, while others had no idea whether such services were even compatible with their handsets.
For those not intimidated by the technology, mobile payment is a social leveller, helping to bridge the digital divide for those without internet access. “Welfare reforms are ‘digital by default’,” says Ross Macmillan, a consultant at allpay. "Mobile applications and payments have an important role to play in bridging the digital divide and go some way in ensuring that no level of society gets left behind."
“Nearly 60% of the top 100 housing associations in the UK are using the allpay mobile application so that tenants can pay their rent instantly,” Macmillan says. "From February 2012 to March 2014, 388,506 transactions were processed through the application, collecting £53.8 million. And this figure is increasing rapidly.”
This suggests customers will not be apathetic as long as the technology proposition is useful to them.
In the UK, Barclays is the most popular bank for mobile banking, according to Buzzcity, probably owing to the success of Pingit, Barclays’ mobile payments app. The bank says Pingit has been used to make payments worth more than £400 million since launching in February 2012.
And uptake is accelerating: in the first three months of 2014 the volume of transactions made with Pingit has increased threefold in comparison with the same period last year. More than half of those transactions have been made to split food bills or pay friends, while 14% of payments were to pay rent.
Customers are clearly noticing which banks are investing in mobile banking, and banks are seeing the benefits. In the US, Bank of America, Chase, Citibank and Wells Fargo were the leading mobile banking institutions, while BNP Paribas, Crédit Agricole, Société Générale and Banque Populaire were most popular in France, says Buzzcity.
“If you can get the product right – and it’s intuitive and trusted by the customer – it will be used,” says Macmillan.
It remains to be seen whether or not Paym will be seen as really useful by a large number of people in the UK, or a convenience technology for a relatively small number, but Macmillan is optimistic.
“The Paym scheme promises to propel mobile payments to the masses and will help drive mobile payment technology forward to aid both consumers and businesses," he says.