John Gower is an analyst for NerdWallet, a personal finance website dedicated to helping consumers find the best cd rates, brokerage accounts, credit cards and more.
Mobile banking has taken off in the last few years, and is likely to attract more consumers in 2013. For investors looking to expand their portfolio within the banking or financial services industry, mobile banking companies are making waves with significant growth trends in 2013.
Although mobile banking has been around for at least the last five or six years, large banking institutions are expanding and upgrading their mobile banking application features to stay afloat in a world that is constantly “going mobile”. Big banks are developing ways for their customers to pay bills, make transactions, and move money with nothing more than the power of their smart phones, while new mobile banks—banking companies that exist exclusively online—are popping up everywhere. These companies, like GoBank (owned by prepaid card provider Green Dot) or Simple, are the inevitable consequence of consumer demand for banking services that do not require traveling to a store or building, but rather through a mobile device.
As this demand grows, the mobile banking industry should be seen as an investment opportunity to those who want to diversify their investment portfolios and jump on board to a newly forming market directed at mobile and tech savvy consumers. A Wall Street Journal report made note that “Mobile banking represents roughly 8 percent of transactions, with online banking at (approximately) 53 percent and branches at 14 percent”, with trends growing in favor of mobile banking.
Currently, 57% of US consumers use mobile banking features, and by 2017, more than 1 billion mobile subscribers (15% of global mobile subscribers) will use mobile banking. This growth is unprecedented, and is likely why the industry is being eyed by key investment and market analysts.
Mobile banking has always been a hot topic in the industry, and a half-decade of mobile banking has allowed for market analysts with enough data to make some interesting insights regarding its trend. According to BankTech.com, mobile banking has become so significant, some analysts have already concluded that it has “displaced desktop-based internet access and will soon become the preferred vehicle for carrying out banking activities.” A few other mobile banking market predictions include:
- Natural language queries will provide customers with the ability to interact with a banking app similar to a conversation with a bank teller or a customer service representative.
- “[T]he tipping point for smartphones has already arrived. However smartphones are predominately used for transactional or quick access, such as looking up restaurants, products or transit information. A consumer is more likely to use a tablet or a desktop for more analysis-based activity […] In terms of banking, one can think of transactions being completed through mobile devices, but budgets or financial planning will still be done on desktops, potentially to be replaced by tablets.”
- Cross integration will allow a customer to begin a banking enrollment or query or banking function on a mobile phone and complete it on a desktop. “Customers will be able to access their mobile applications through the car voice system or screen. And, they will get critical alerts on television. Enterprises who adopt this paradigm will create solutions that are likely to garner significant distinction in the coming year.”
For investors, this translates into a multifaceted opportunity, both in mobile banks as well as the technologies that make various functions of mobile banking possible.
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This entry was posted on Monday, March 11th, 2013 at 8:29 pm and is filed under Business Education. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.