Internet, mobile bank convergence to impact on consumer expectations

MANILA, Philippines - The move towards the convergence of Internet and mobile banking will impact not only on how channel strategies are crafted in institutions but also in overall customer engagement approaches.

According to research group Financial Insights, mobile banking has faced its fair share of hurdles since its inception. Presently, Asia Pacific banks and telecommunication providers are struggling to find the most appropriate business model to balance the revenue requirements of the multiple parties involved in the value chain against the needs and expectations of consumers.

In addition, the varying levels of mobile phone technology and telecommunication infrastructure across the region make it extremely difficult to deploy one effective mobile financial solution for all countries, the report added.

“Mobile banking and payments have been flourishing in Asia Pacific for several years. In previous reports, Financial Insights stated that mobile banking will become a common banking channel in Asia Pacific, and 2009 has strengthened this belief with innovative mobile solutions being deployed across the region,” according to Abhishek Kumar, senior research analyst, Asia Pacific banking advisory service.

The report noted that among the emerging trends in mobile banking in Asia Pacific are the fact that while in the past, mobile banking and payments were driven by telecommunication players, now, banks are taking the lead in deploying such services.

“This is not to say that telecommunication companies have been cut out of the mobile banking proposition. Rather, banks are now partnering with telecommunication companies and other information technology vendors to deploy such solutions on a more equal footing,” it said.

Currently, mobile banking deployment differs significantly between developed and developing countries in the Asia Pacific region. Financial institutions in the region’s mature markets are seeking to converge Internet and mobile banking channels, whereas those in developing markets are looking to grow customer bases by focusing on the unbanked.

It was also pointed out that newer and more innovative mobile banking solutions are being implemented. This has resulted in mobile banking services moving beyond being just an extension of current financial services delivered via a mobile device.

By fully integrating mobile solutions with the banks’ core systems, these solutions now provide more value-added services not only to the customers but also to the bank itself, the report said.

“Ultimately, with the progression of mobile technology and financial services, Financial Insights believes that majority of financial institutions in the Asia Pacific region will seek to converge the Internet and mobile channels in the hopes of truly making financial services available to customers anywhere and at any time. The customer will no longer have to go to the bank because the bank will be in their pockets,” Kumar added.

Rising mobile penetration in the Philippines will expand the mobile banking user base to beyond 11 million by the end of 2011, according to research firm RNCOS.

In its report, RNCOS said the green signal from the Philippines government to telecom operators to make free partnership with banks has opened a slew of opportunities for the banking industry.

“Now Filipinos can use their mobile phones as ‘virtual wallets’. This has made the Philippines the leader among the developing countries in offering financial transactions over mobile networks. Thus, with increasing number of mobile subscribers and increasing level of mobile penetration, the mobile banking will see tremendous growth in future,” it said.