App With The Bank!

Mobile banking is not a new thing, though it may seem so with modern banking apps available for smartphones. It all started in the late 90s, when first banks offered simple tasks via SMS. Using a special message template you could check your account balance or even make a money transfer to a predefined recipient. It was later extended with small applications embedded in SIM cards (SIM Toolkit), but bank clients were mostly bound to a specific carrier. Then there was WAP, which was dubbed “a truly mobile Internet” for cell phones, but it didn’t live up to its promise: because of design limitations in devices it was too clunky and too expensive to use. Only a minority of banks decided to support it.

With the first feature phones and smartphones, so-called “light” versions of websites appeared. They were designed to be simple and small enough to provide mobile users with fast and optimized experience. This was a milestone in mobile banking as more and more clients started to use their phones to access to their bank accounts. Now they could do it anytime and anywhere within the cell network or Wi-Fi hotspot coverage.

Apping the ante

But the real breakthrough came when banks started developing apps for smartphones’ operating systems. These pieces of software further enhanced user experiences and allowed for much wider range of features. Now, a mobile app is a must for a bank, since clients adopted this kind of banking very quickly.

Figures don’t lie: the number of mobile banking users grows fast, much faster than in the case of online (desktop) operations. In the US, the average monthly banking uses with mobile devices doubled from 2011 to 2014 according to a Gallup poll. Meanwhile, the “classic” online usage rose only by 10% (still, it’s more than twice as big compared to the mobile usage in absolute figures).

The 2015 Federal Reserve's report finds that 52% of smartphone owners in the USA with a bank account have used mobile banking in the 12 months prior to the survey, up from 51% a year earlier. The most common use of mobile banking is to check account balances or recent transactions (94% of mobile banking users) and transfer money between an individual’s own accounts (61%). The share of smartphone users who reported having made a mobile payment in the 12 months prior to the survey has increased to 28 percent, up from 24 percent in both 2013 and 2012.

Mobile world of banking

Forrester Research compared US and European markets. Its findings show that 36% of US and 25% of EU consumers are active mobile banking users, up from 13% and 9% in 2011, respectively. In the US, the most popular mobile banking activities are checking an account balance (80%), viewing a recent bank transaction (52%) and transferring money between bank accounts at the same firm (45%). In Europe, balance checking (78%), followed by viewing or checking a recent bank transaction (53%), and receiving an SMS alert (40%), are the top three most popular mobile banking activities.

What’s interesting, the number of people using mobile banking apps in Asian countries is higher than in the US or Europe: from around 60 percent in Singapore, India or Thailand, up to 73 percent in China or even 77 percent in Indonesia, according to a 2014 Statista survey.

The same survey shows that Poland stands out from other European countries with 58 percent of mobile banking apps users. PRNews.pl service in its report for Q3, 2015 reveals that over 5 million Poles (out of population of 38.5 million) actively use mobile banking, which means an increase of over 54 percent year-to-year. But these numbers show both mobile bank access channels: with mobile apps and light versions of bank websites.

What is the actual impact of mobile banking in terms of financial data? A joint report by the British Banker’s Association (BBA) and EY company shows that customers in the UK moved £2.9 billion (US $4.4 billion) a week using banking apps in 2015 – up from £2 billion in 2014. But this is nothing compared to China: a report released by Analysys International reveals that mobile users made transactions worth 7.95 trillion Yuan (US $1.29 trillion) in Q4, 2014 – a year-to-year growth of 66.1%.

The pros and cons of apping

Mobile banking apps are more comfortable to use than light versions of websites, since they are consistent with the user experience of a smartphone’s OS. They make use of system features otherwise unavailable in a web browser, such as access to a contact list, a camera (for scanning QR/bar codes, for example), or a specific onscreen keyboard (like numeric keypad only when entering PIN). They enable better security through pairing the device with your bank account, thus making your mobile app credentials useless in other devices, while allowing you to use simpler login options – PIN only, face recognition or fingerprint reading.

But these features sometimes can be considered as drawbacks. First of all, you need to install an app, then to pair a device – authenticate it in your online banking system, which takes a bit of time and effort. Of course, it’s a one-time process, but when you’re on the go and don’t have the app, finding that you can’t make some kind of operation in a light banking system, although it’s enabled in the app, can be frustrating.

Then, there is a question of privacy: modern mobile banking apps are so feature-rich, because they can access almost every function of your smartphone. When you install an app, you grant it permission to use your device’s GPS, camera, messaging, calling, wireless communication, contact list, NFC module, and more. Right, it’s for a better user experience, but in the era of big data, are we perfectly sure what’s underneath those bells and whistles?

In the near future smartphones with NFC and mobile banking apps are expected to replace – or at least challenge – credit/debit cards and cash for making payments not only in POSes, but also as cashless clearings between individuals. Even new bank websites created with Responsive Web Design, which adapts itself to any type of device, although will be very useful in this post-PC era, can’t be that advanced.

Increasing the adoption of mobile banking apps

Some banks are going the smart way and allow accessing some features of the banking features without requiring a user to authenticate. For example, it is quite common to see a banking app that allows a user to preview the ATM locations, contract information, exchange rates and other data without the need of logging in. Even though this is a great start, it certainly does not contribute enough to on-board the clients via the "mobile branch" of the bank. 

This can easily be changed when such technologies as Kontomatik Sign in Widget are in place. When adding a banking API tool that works flawlessly on a mobile device, a bank not only can promote its offers to mobile users, but also can supply comfortable registration forms that only ask for the user to authenticate using his current bank credentials. In other words, with an implemention of Kontomatik Sign in Widget a user would need to spend a nearly equal effort to open a new account via his mobile device as he would have to spend when just accessing his current banking data.


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