Mobile banking has become the top investment priority for retail banks, according to new research from Ovum.
Increasing profitability is top of banks’ agenda, as bottom-line growth is still difficult in current market conditions, but this is a considerable challenge. To overcome these difficulties, institutions are focusing on increasing sales and servicing effectiveness, leading to accelerated investments into channel technologies in 2014.
This has caused mobile banking projects to receive the most attention from retail banks globally, as they look to drive sales and improve banking efficiency, leading to high customer satisfaction levels.
Ascendance of mobile in banking
Mobile’s rise has shifted it from a new and uncertain channel to become something that has a direct impact on financial services providers. Research from Ovum reveals that this is true across the globe, with the majority of respondents expressing increased interest in mobile banking. Most also expect the channel to become a competitive necessity within the next three years.
“Mobile banking has become an incredibly important channel for banks worldwide. In some large financial institutions, mobile usage is approaching two thirds of traffic,” says Kieran Hines, senior analyst, financial services technology, Ovum. “With technology advancing quickly, customer expectations of mobile banking are rising. While banks’ investments are depressed by a constant focus on cost containment, enhancing customer experience through lower-cost digital channels is a priority, something mobile banking fulfills.”
The increasing consumerization of technology provides a challenge to financial institutions. The constant innovation in mobile devices alters user expectations, leading to demand for high-quality design, functionality, and technological capabilities of applications. As soon as the device is ready, consumers expect content and tools to keep pace.
“Banks must continue investing in mobile banking to remain competitive,” Hines advises. “The mobile channel must be enhanced in parallel to the overall digital banking strategy, encompassing all banking touchpoints. Ultimately, financial institutions must ensure mobile banking has a rich user experience and functionality to drive engagement in digital channels.”
Who is keeping up?
Realizing value from mobile banking solution depends on the technology’s ability to execute a bank’s strategy. A decision to purchase a specific offering or product should be based on a broad range of factors. With the huge array of devices available to access mobile banking, flexibility is paramount. Functionality should be tailored to each device, as user experience is vital in ensuring customer satisfaction and retention remains high.
In its latest research, Ovum has identified three vendors that provide mobile banking offerings that combine strong execution capabilities with broad functionality:
• Fiserv Mobiliti is considered by Ovum to be the market leader in this space.
The vendor has a large and loyal customer base, driven and developed through its client relationship model. Through focusing on modularization and extensibility, which allows easier customization, Fiserv is taking its product to the next level.
• SAP’s Mobile Banking solution is another leader in this market.
Its offering is constantly under development, alongside the vendor’s overall mobility strategy. With a clear development path and a functional roadmap, SAP’s experience in banking software shines through in its offering, Ovum says.
• Oracle’s Flexcube Mobile Banking has recently seen significant fresh investment.
With Oracle’s existing relationships, installations, and banking experience, it is well positioned for upgrades. Flexcube Mobile Banking also has an array of features that align with current mobile trends and it is easily configured, managed, and developed.
- Look Before You Leap: Key Considerations for Moving to a Digital-Only Model
- Disruptions Past, Present and Future Raise the Existential Question: “What Are Banks For?”
- What Banks Can Learn From the United Capital Acquisition
- What the Win-Win Partnership Between Apple and Goldman Sachs Means for Payments
- Reconciliations — DLT brings new solutions to solve an old problem