APAC Banks Fighting To Gain Mindshare In Mobile Banking

Banks in Asia/Pacific are ramping up their mobile banking propositions as they race for mindshare among the region’s increasingly technologically savvy customers. The mobile channel is the top priority channel for most banks in 2012, and leading banks in Asia/Pacific have deployed their best resources to this “channel of the future”, launching standout features and functionalities, ensuring growth in activity rates among customers, and better managing the technology requirements of this channel.

A recently published IDC Financial Insights report, “Business Strategy: Have Leading Asia/Pacific Banks Raised the Standards for Mobile?”, examines the leading mobile financial services offerings in the region, as well as the best practices set by these mobile banking leaders.

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Michael Araneta, Associate Consulting and Research Director for IDC Financial Insights Asia/Pacific stated, “The initial focus for leading banks was to offer baseline functionalities for mobile banking that are similar to those found in PC-based online banking: transaction history, payment origination, and funds transfers. However, some banks have succeeded in launching standout features that leverages new mobile form factors, which fit very well into the increasingly mobile lifestyles of Asia/Pacific customers.”

Araneta continued, “Underneath all the hype that surrounds the phenomenon of mobility is the shift in the notion of what is a banking channel. Prior to the emergence of the mobile channel as the major mode of engagement, a channel was effectively owned, managed, designed, and controlled by the bank. The bank itself ensured that channels worked in alignment with its own conditions, including processes, workflows, and channel strategies. Today, the power has shifted to the customer who now owns, manages, and controls the device at hand. This means that banks’ mobile strategies need to keep in mind customers and customer preferences more than ever.”

This IDC Financial Insights report also highlights the technology considerations crucial for banks as they launch their mobile banking offerings. Firstly, there still appears to be no industry convergence on a single model or platform for mobile banking. Consequently, banks are leaving the mobile Web versus native app debate unresolved, and are instead striving to offer both. Secondly, many vendors crowd the mobile space, which suggests that the market will consolidate soon. IDC Financial Insights suggest that banks follow the lead of their main core provider or look for a vendor that supports multiple channels, not just mobile.

Araneta added, “There are two areas that banks are pressured to respond to, especially if they want to be seen as a market leader in mobile: nearfield communications (NFCs) and mobile wallets. However, in most markets, NFC is slow to reach critical mass and may never reach such market prevalence. If the NFC models being proposed are not transparent and clearly beneficial for the bank, then the bank may find it better to pursue alternative models of next-generation payment technologies.” On the other hand, the emergence of mobile wallet alternatives may require banks to have a well thought-out strategy, especially if these mobile wallets present compelling offers and reward programs for consumers moving forward.

Araneta concluded, “Mobile wallets present a new layer of intermediation that banks need to work through. Rather than focus on launching their own mobile wallets, banks should aim to work well with various existing mobile wallets, so that they can influence their customers through them.”