Banking Review

What’s going on with mobile banking?

Mobile phone penetration in Australia has been stable for the past two years, with 92 per cent of the population owning a mobile phone according to research from Nielsen Media Group.

As would be expected 94 per cent of Australians under 40 have a mobile phone. Those under 40 have the highest levels of mobile internet capability. Mobile banking in Australia is increasing in popularity with 16 per cent of customers with mobile internet capability as active users, up from a mere 9 per cent in 2007.

iPhone users are more likely to access mobile internet services; not a surprise given the breadth and scope of applications available. In the UK, iPhone users are around twice as likely as users of other smart phones to access any type of mobile internet service. In Australia, the iPhone accounts for around 13 per cent of the market, fourth in popularity behind Nokia, Samsung and Sony.

KPMG has identified that mobile banking offers Australian banks the potential to grow into Asian markets. Its research also found that educating customers about mobile banking security and privacy will be an essential part of any mobile banking deployment.

Mobile banking also has the potential to help banks retain existing customers by providing another component to the overall customer service proposition. Mobile banking has the potential to service customers remotely, negating the need for branch access for servicing existing customers moving to new locations; an appealing prospect for the non-Major banks.

So why haven’t most Australian financial services organisations embraced mobile banking? Is it because of the potential complexity servicing all devices? Or is it the integration with existing core banking or Internet banking systems?

With Internet banking, it is a matter of ensuring that the service works on multiple browsers. Mobile banking takes on a new level of complication with some solutions being downloadable applications while others browser based. Multiple downloadable applications may be required to service all handsets, so costs escalate.

Suncorp and CBA mobile banking works across most handsets. ANZ and St George mobile banking works only on iPhone or iPod Touch.

NAB remains the only major without a mobile banking service, offering SMS banking as its only solution. Curiously, NAB has recently signed long term mobile advertising deals with Telstra and the 2009 AFL and NRL matches. Why advertise to a mobile engaged audience yet not offer a mobile solution?

Bankstown City Credit Union is the first Australian credit union to offer mobile banking to its customers.

“BCCU sees the opportunity to grow and service our customer base outside the Bankstown area. Our members can travel the world and still access their accounts. Our customers have embraced our mobile banking service,” Enis Huseyin, IT Manager of BCCU told Online Banking Review.
“We chose a browser based mobile banking solution and were up and running in around two weeks. Using a browser based solution was a simple choice; we don’t have to manage a database of Java apps to service multiple phones,” Huseyin continues.

Brent Jackson, CEO of Rubik Financial, providers of the BCCU mobile solution, told Online Banking Review, “The statistics from internet banking logs show that customers are already trying to access Internet banking via their mobiles. The right solution and marketing can quickly provide the mobile banking service customers are seeking. Bank of America had one million customers in 6 months; they met the demand of customers with a browser solution that worked on most handsets.”

Compared to overseas markets, Australia is lagging behind in uptake. In the US, mobile banking usage grew 188 per cent in the 12 months to January. Are customers prohibited from using mobile banking because of Australian telecommunications pricing structures for mobile internet connectivity?

Will more credit unions and banks take the Bankstown City Credit Union lead and embrace mobile banking? When will mobile banking become a mainstream, core offering in Australia?