European Banks Play Catch Up With Mobile Banking
January 28, 2013
Compared with their counterparts in the United States and Asia, European banks in general have fallen behind consumer demand for mobile banking services. But in the coming years, experts predict broad deployment of mobile banking opportunities for European bank customers will rapidly increase.
“It has taken a long time for European banks to realize that mobile banking is important, compared to Asia and North America, where there is real innovation,” according to Daniel Mayo, financial services analyst at Ovum (a telecom and IT service advisory firm).
In the U.S., customers of leading financial institutions are able to conduct a host of different functions from basic account-balance inquires and funds transfers, to more complex operations like personal financial management and remote deposit capture from one’s smartphone. In Europe, customers are largely limited to basic banking functions with smartphones, and some banks don’t even have mobile applications.
New mobile banking developments, however, are creating waves in the European market. In the U.K. for example, Barclays launched the most innovate service available to mobile customers last year, called Pingit. Through the Pingit application, customers could make payments to any U.K. bank with only the recipient’s telephone number required. The app was a huge success with more than 120,000 people downloading it within five days of its release, encouraging Barclays to lower the age minimum to 16 and increasing the amount of money that could be sent.
Pingit’s success has encouraged the U.K.’s Payment Council to enable mobile transfers between all domestic accounts in the near future. Furthermore, Chris Skinner, chairman at the Financial Services Club (an international networking group for members of the financial industry) believes the mobile market in the United Kingdom is poised to move forward. “This is the year that UK banks will truly move to mobile. Barclays led with Pingit, but this year will see a lot more from banks such as Lloyds banking Group and HSBC,” says Skinner.
Consumers, however, are not the only ones to gain from expanded mobile banking services. Financial institutions can gain as well from the large amounts of potential data that can be collected. With the growing importance and effectiveness of big data analytics, the data collected from mobile banking transactions can assist banks in developing more tailored banking products for the future that will improve customer satisfaction overall. “At the moment there is a realization that big data is about your internal and external data and we are just starting to see the user cases emerging,” says Mayo. As banks begin to see real gains from big data collection and analysis, customers should begin to see a more targeted approach with banking products and services.
Thus while mobile banking demand has largely gone unanswered in the past, clear signs point to British and European banks in general improving their banking product portfolio with mobile banking services. By providing customers with improved mobile banking like those in the U.S. and Asia enjoy, customers and financial institutions stand to benefit both in the present and moving forward. As the old adage goes, “better late than never,” and as mobile banking continues to grow significantly, European banks will be in better position to capitalize on its popularity and potential new revenue streams.