Mobile Banking: Over-hyped Gimmick or Credible 21st Century Banking Channel? (Strategic Focus)

• This report examines the impact and future growth of mobile banking, and assesses whether it will become a mainstream interaction channel.
• The report assesses the opportunity for mobile banking services in both developed and developing markets.
• Geographic coverage includes Europe, North America, Asia, sub-Saharan Africa and Latin America.

• Gain insight into why the growth of mobile banking will remain modest in developed markets.
• Understand the IT investment priorities of retail banks in Europe and North America in relation to the mobile banking channel.
• Receive guidance on why serving the unbanked segment of society represents mobile banking's best opportunity for significant growth.

Overview

Catalyst

Summary

Key Messages

Mobile banking is a credible channel, but usage in developed markets will remain low

IT spending on mobile banking is continuing, but it is not the highest priority channel

Mobile banking's greatest opportunity involves serving the needs of the unbanked

Retail banks and technology vendors must be prepared to play the long game

Table of Contents

Table of figures

Table of tables

Market Opportunity

There is no universally agreed definition of mobile banking, which doesn't help its cause

Separating mobile payments from contactless-card technologies

Mobile banking services have existed for a decade, but adoption is mostly modest at best

The growth of mobile banking services in South Korea demands careful interpretation

Mobile banking has struggled in Europe and North America: will this change in 2009/10?

The difficult economic climate is refocusing the attention of consumers to their personal finances

Mobile banking devices and interfaces have thankfully improved, thereby enhancing the user experience

iPhone, therefore iBank? Understanding the effect of Apple's flagship cellular device on mobile banking

After multiple false starts, the mobile banking ecosystem is entering its next phase of development in 2009

Catering to the unbanked will have a positive influence on the growth of mobile banking

Assessing the mobile banking market opportunity in developing regions

Investment programs have been launched to stimulate mobile banking services in developing countries

Charting the emergence of mobile banking services in developing countries

Case study: the remarkable growth of M-PESA

Other operators are seeking to mirror the success of M-PESA

The role of mobile banking in Afghanistan's road to economic and social recovery

Serving the unbanked in developed regions is also a natural fit for mobile banking services

Mobile banking services will replace traditional remittance flow methods

If you can't beat them, join them: Western Union's strategy to counter the threat of mobile remittances

Summarizing the market opportunity for mobile banking

Impact on Banks

In 2009, mobile banking features in the channel strategy plans of most retail banks

Mobile banking channel is not a high priority channel for IT investment in 2009

Retail banks must be willing to play the long game in order to achieve decent revenues

Banks will need to prepare themselves for inevitable operational and technological impacts

Banks must ensure they make adequate security provisions for mobile banking services

Banks will have to share revenues from mobile services with others in the ecosystem

Go to Market

Platform providers should capitalize on taking the development pain away from banks

Security vendors should ensure their product suites cover mobile banking solutions

Recommendations

Vendors should not overhype the potential of mobile banking services in developed markets

Technology vendors, like their banking industry clients, must be prepared to play the long game

Vendors should seek opportunities in emerging markets to capitalize on the unbanked segment

APPENDIX

Definitions

Acronyms

Methodology

Further reading

Ask the analyst

Datamonitor consulting

Disclaimer

List of Tables

Table 1: Mobile penetration growth rates for developing regions

Table 2: Mobile penetration and bank accounts in selected developing countries

Table 3: Remittance flow to developing countries, 2006 to 2008

Table 4: Summarizing the market opportunity of mobile banking

Table 5: The operational and technological impacts of mobile banking

List of Figures

Figure 1: The components of informational and transactional mobile banking services

Figure 2: The growth of registered mobile banking users in South Korea, 2007 to 2008

Figure 3: Factors inhibiting the growth of mobile banking services in Europe and North America

Figure 4: End users are satisfied with the performance of Apple's iPhone device

Figure 5: The mobile banking ecosystem in 2009

Figure 6: The alternative capabilities of a mobile device in developing regions

Figure 7: Snapshot of selected mobile banking services in developing regions, 2009

Figure 8: Mobile banking channel strategy in 2009

Figure 9: Retail banking technology investment priorities, 2009

Figure 10: The development phases of mobile banking in developed countries

Figure 11: Revenues received by players in the mobile banking and payments ecosystem

Figure 12: The relationship between the Monitise platform and the four phases of development