M-banking will not replace bank branches


Integrating different points of presence required to suit all user needs

While mobile banking is set to rise dramatically over the next five years, it will never fully replace local bank branches, according to a new study.

Forecasts show that by 2017 one billion people will be carrying out online financial transactions or engage in mobile banking. However, few are willing to completely do without personal interaction with advisors, showed a study conducted by GFT Technologies.

One clear finding of the study is the key to success will be omni-channel banking. This is because customers use different banking channels in parallel, from smartphones to tablets and personal computers. As a result, the key challenge for the banks will be to match all the different processes involved and integrate them.  'The bank that customers opt for will be largely dictated by the mobile banking options offered,' stated Marika Lulay, chief operating officer at GFT. 'The traditional banks will really feel the pressure placed on them by the direct banks and the providers of digital wallets, or in-app billing options.'

The GFT Study also highlights the huge gaps between habits in different countries. In Spain and Brazil, over 60% of respondents said they already use mobile banking solutions, whereas German customers were much more cautious about adopting new methods; only 26% use their smartphone for banking purposes.

The UK currently sits between these two extremes, with nearly 40% of respondents adopting the mobile banking platform.

'If the customers' fears of fraud or security breaches can be overcome, this number is certain to rise,' added Lulay.

Additionally, over half of the respondents were unwilling to completely do without their local branch office; customers need personal contact, especially when it comes to larger transactions or credit arrangements. The picture is different for money transfers, cash withdrawals or bank statements, areas where, according to the study, at some point soon traditional branches will not be required for these types of activities.

'This is a time of transition for us,' noted Lulay, recommending that the banks combine different sales channels into integrated offerings. 'It's important to understand which branches should be kept on and make these future-ready by ensuring they provide a rich selection of interactive tools and entertainment options.'

The study points to a variety of pioneering bricks-and-mortar concepts. For example, in the first quarter of 2010, San Francisco's first banking café opened run by ING Direct, allowing customers to open a new account while enjoying a cappuccino.

GFT offers banks specialist support to gear themselves to future requirements. One area in which GFT can help is security, a topic highlighted by the study as fraught with difficulty, not just in terms of protecting smartphones but also when it comes to managing passwords. One way to enhance security comes in the form of near field communication (NFC) TAN, a mobile authentication process developed by GFT in collaboration with the University of Tübingen in Germany.

Another key area highlighted by the study as a future trend will be voice recognition, a field in which GFT has already developed a proof of concept for a biometric voice authorisation system.


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