Mobile banking is no longer a “business opportunity” for banks. It’s an imperative. With over 1 billion users already transacting across the globe in 2015 (according to IDC), demand is set to continue to grow – cutting across both developed and developing economies.
Banks are not the only one chasing users however. As a new set of competitors starts exploring how to get in on the action, users will soon be able to choose who they transact through. As such, a bank’s ability to meet customers’ needs and expectations through mobile will soon start affecting customers’ retention and acquisition, new revenue streams and even brand loyalty, according to Marwan Elnakat, Director eBanking security for Middle East & Africa at Gemalto – making security non-negotiable.
As cellphones become even more inseparable from our lives – influencing everything from how we learn, plan, pay and work – so too are expectations about what they can and should be able to do growing. “Because mobile has become synonymous with ‘instant’, customers now live in a world of heightened expectations where they often imagine apps and services before these are even created,” says Elnakat.
“We’re seeing this in the case of mobile banking particularly, where consumers are demanding ‘always-on’ services: banking must be available in one click anywhere, anytime and on any device. This means that banks are having to work extra hard to perform against and meet expectations in this space.”
He notes that banks can expect the mobile banking revolution to continue, fuelled by increasing demand being seen across the globe. In the MEA (Middle East and Africa) region alone for example, the value of online banking transactions is set to reach US$1.3billion in 2017 and over US$2 billion by 2020, according to Juniper Research. “While these forecasts are based on what is already possible in this space, they also take into account the array of new financial services that banks will need to introduce to customers.”
Many of these will relate directly to how customers engage with and use their bank cards using their mobile apps – from changing payment transfer limits to activating their banking card for international payments when they go abroad. Mobile banking apps will also ensure users can open new accounts, sign up for direct deposit, pay bills, take out loans, and deposit cheques by photographing them: all from their cellphones.
Adoption and uptake will depend on trust however – relating directly to security. For banks to succeed in rolling out these new services, they will have to develop aggressive and agile mobile banking strategies that effectively leverage the cellphone, using it as a channel that links directly to a hub of other channels. “For these new services to ‘work’ the mobile channel must serve as a secure platform for the banking App that cannot be compromised,” Elnakat notes.
Central to an App’s use is its ability to authenticate: ensuring that the user is, in fact, who they claim to be. Ability to authenticate also needs to be combined with ease of use – as both are critical determinants of uptake. “Given that cellphone banking is all about convenience, the security measures banks put in place must be similarly convenient. While options such as mobile OTP (one-time password) and soft tokens are available, many users find it far easier to rather use fingerprint, facial, iris or voice recognition. Biometrics have already overtaken PINs in terms of trust by some end users.”
As the mobile banking channel continues to offer new opportunities for banks to connect with their customers and differentiate themselves from the competition, financial institutions should also use them to learn more about their target audiences, according to Elnakat.
Banks have millions of users, each different from one another with different profiles and banking habits. This links to the type of security tools offered, making a multi-factor security approach a core component of the banks’ digital strategy. This, in turn, forms part of the greater customer engagement strategy: delivering a unique user experience. “By leveraging security as a strategic component and ‘feature’, offering a wide range of security solutions for end users to choose from and feel confident with, banks can invite and integrate users far better – involving them in their digital security strategy, to build loyalty and ensure trust and engagement. In this way, mobile banking can be leveraged as a core component in a bank’s overall marketing strategy, driving and enabling this revolution.”