61% Of People Access Mobile Banking On A Regular Basis

The traditional bank branch is in danger of becoming a financial dinosaur as more people turn to smartphones to conduct banking transactions.

According to the Mobile Ecosystem Forum’s recent Mobile Money Report, mobile banking has gone mainstream. The report said that 61% of people use their mobile phone to carry out banking activity, with 48% using a dedicated banking app.

The most common activity within a mobile banking app is to check a person’s balance. Since MEF last studied the mobile money landscape in 2014, the number of people who check their balance on a smartphone has increased from 28% to 44%. People are also more comfortable with paying bills in an app—29% in 2016 compared to 20% in 2014—with 22% sending money to other people through the app—an increase of 6%, the report said.

The report makes it clear that mature mobile markets such as the United States, the United Kingdom France and Germany have migrated towards mobile banking, but the real growth is in emerging markets.

Mobile banking has become more prevalent in MEF-identified growth markets such as South Africa, Kenya and Nigeria thanks to an increase in the number of local agents that can turn cash into mobile currency. The report said that 35% of people in emerging markets send money to friends or relatives via a mobile phone, with 62% sending pre-paid airtime to someone else.

Mobile Banking Is Just One Available Option

Despite the increase in mobile banking, there are still people who want to bank in person.

Around 28% of the 6,000 people interviewed for MEF’s report said that a bank branch was the preferred location for daily banking compared to the 26% who are mobile first. There are a smaller percentage of customers who use various avenues to bank, with 19% of people accessing their bank on a daily basis through one of three channels—mobile app, physical location or website access via a desktop.

A move towards mobile banking means that the physical bank branch is under threat. For example, a report by the British Bankers Association cited by MEF said that customers in the U.K access banking apps over 7,610 times a minute, with the majority of those actions related to checking how much money is available.

Digital Banking Is A 24/7 Experience

The news that physical bank branches need to be more aware of digital alternatives should come as no real surprise.

A recent survey by The Economist said that 49% of bank executives believed that the traditional transaction or branch-based bank model is dead, with digital cited as the reason why. Banks have to become multi-channel operations to survive, especially for customers who rarely visit a branch at all.

Internet banking is far more convenient with most of the functions offered in a bricks-and-mortar locations replicated online. A physical location can offer customers a chance to speak with a bank staff member or adviser, but a digital version is not beholden to set opening hours.

Mobile banking takes the 24/7 experience to the next level by offering customers the option to bank checks with a smartphone camera, for example, or even transfer money to customers of other banks. The report said that the migration of banking activity from branch to desktop is already surpassed by the move from desktop to mobile, with 72% of people using a mobile phone in the last six months to conduct a bank transaction.

“The adoption of mobile money continues to advance,” said MEF’s CEO Rimma Perelmuter, in a press release. “In developed markets, mobile payments and banking are driving a revolution in convenience. In growth markets, they are giving millions of people access to financial services for the first time. It’s important that the industry builds on this momentum. The research shows we can still do more to improve payment flows, improve consumer trust in mobile money to allay privacy and security concerns.”

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David Bolton
Former ARC Writer
Reading time: 5 min

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