Despite 59% of global consumers stating that online banking on their mobile phone is important to them, they are not willing to pay for it, KPMG's third annual Global Consumers & Convergence survey reveals.
In order to understand the future for the mobile banking market KPMG surveyed over 4,000 consumers in 19 countries world wide.
The resulting survey presents some startling regional differences and delivers a clear picture to banks of consumers' future expectations.
There is however, a huge potential for banks to grow their market with mobile phone users, as globally 53% of consumers say they are comfortable with the idea of using a mobile phone for financial transactions and 54% state that they are 'at least somewhat likely' to conduct banking through a mobile device in the next 12 months.
Only 19% of global consumers are currently conducting banking through a mobile device. This means that banks are missing out on the massive majority, some 81%, that have yet to be persuaded that mobile banking is a service that is not only available and worth using, but importantly is worth paying for as well.
Among those respondents who had not conducted banking through their mobile device, 44% cited security and privacy as the primary reason.
Tareq Al Sadhan, KPMG in Saudi Arabia's Managing Partner comments, “Partly fuelled by the arrival of smart phones, consumers worldwide are showing strong demand for bundled services and mobile banking is part of this equation.
The next challenge will be to allay consumers' concerns over privacy and security in order for mobile banking to succeed and be financially viable and profitable for banks in the future.”
KPMG's Consumer and Convergence III survey's findings suggest solutions may be found in addressing consumers' concerns over security and privacy and that if banks can win over consumer confidence in this area they stand to win the mobile banking customer of the future.
“The findings of KPMG's survey outline the dilemma for banks,” continued Al Sadhan. “Consumers want the immediacy of secure banking on their mobile devices but they do not want to pay for the privilege. So, while early entrants to this space will likely build strong customer share, it is unlikely that the revenue from the service will cover the costs. Nevertheless, banks should plan on providing a mobile banking service to with the aim of avoiding the erosion of market share to competitors with this offering.”
Indeed, strong security or privacy protection was the most important factor for 32% of respondents globally who bank at least once weekly online, with ease of use being the second most important factor at 20%.
The survey does reveal some good news for banks, as 6% of respondents globally say they are willing to pay to access online banking services from their mobile phone and 17% of respondents state they are willing to pay a limited amount.
Obviously if banks can address the key consumer issues highlighted in the survey's findings then they could see that percentage rise.
Regionally there are some significant differences. KPMG's survey reveals Asia to be the region that is the most comfortable with mobile banking with 23% using the service.
Potentially then, Asia is the region where banks can look to grow their mobile banking services fastest, make quick wins and gain new customers.
North America shows the most resistance to mobile banking with 66% of respondents 'not at all comfortable' with using a mobile phone for financial transactions. In Asia only 36% are 'not at all comfortable'.
In the Middle East/Africa region, 67% of Saudis said they were 'very or somewhat comfortable' with using a mobile phone for financial transactions but only 39% of South Africans said the same.
These differences show the need for banks to look at different cultural needs and expectations when they are positioning their services in different market places and the possibility of having to customise their service offerings to suit different national consumers cannot be ruled out.
Unsurprisingly perhaps, 75% of the over 65 age group is 'not at all comfortable' using a mobile phone for financial transactions.
This age group will be one of the hardest to persuade to change their traditional banking methods as this is the age group, together with the 55-64 age group, that are the most concerned with privacy and security at 51% each.
More surprisingly only a slight majority, 51% of respondents globally, report that their current bank offers banking through mobile devices.
This says more about consumers' perception of the service offering than the reality. But banks will need to work hard to improve customer awareness of the availability of mobile banking, and to persuade customers of the benefits, if they are to hope to persuade them to pay for the services in the future.
With regards to payments, 86% of respondents said they never made a purchase from a vending machine using their mobile phone and 90% said they never made a purchase using a mobile phone through a retailer's mobile site, further suggesting an unfamiliarity or lack of comfort in using a mobile phone for transactions and payments.
This is definitely a growth area for banks with huge potential. However cost, security, privacy and many other issues analysed by KPMG should be addressed before the market can begin to mature.