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Mobile Banking escalates

By AB+F Journalist posted Mon, Apr 14, 2014 01:35 AM
Author: Andrew Starke

The growth in mobile banking usage by customers globally has exceeded even the banks’ wildest expectations with research finding that banks are now overwhelmingly looking for quality in their mobile applications.

A joint CSC-Finextra report released late last week, Mobile Banking – testing time for Apps development, concluded that banks are prioritising security and customer experience when developing their mobile banking apps.

However, there is evidence to suggest that banks should also review prioritisation of platforms/devices as well as their sourcing strategy when it comes to testing.

The aim of the survey, conducted in February 2014, was to get a snapshot of how banks are managing the development lifecycle for mobile applications (both downloadable and web-apps), their priorities for this increasingly dominant channel, and how this informs their approach to testing.

Mobile banking apps from a number of UK banks all experienced service outages in February this year caused by the high number of concurrent users checking balances and making transactions.

This potential for customer frustration is upping the ante on service delivery and forcing bank management to consider investing in more efficient IT development practises, removing constraints and improving time to market.

Wave of next-generation apps

Globally, 55 per cent of banks surveyed said that more than 5 per cent of their current IT budget is allocated to mobile application development. Incredibly, 17 per cent are spending more than 26 per cent, which indicates there are a significant number of new apps in development.

The research also found that the ability to make small payments, whether peer-to-peer or bill payment, is considered by banks to be a more important customer requirement than the ability to manage personal finances or make merchant payments.

However, the emphasis is on having a product that works rather then having all the bells and whistles. Only 15 per cent of banks require their mobile banking products to be seen as innovative in the market.

While most banks are testing their mobile apps in-house, 10 per cent of respondents said they do no prioritisation of testing efforts according to their customers’ device usage, despite clear indications that managing device and operating system proliferation is the biggest challenge when it comes to ensuring a satisfactory customer experience.

There was a fairly even split between those respondents who see mobile application development as a critical part of overall digital strategy (46 per cent) versus those who see it as a niche area within the wider IT department (40 per cent).

This is likely to change as the rapid rise in mobile banking users becomes recognised as the norm by banks’ decision makers.

Tipping point

Bank of America announced in October 2013 that more customers are logging into its mobile platform than its online platform. Similar reports of a tipping point have emerged from banks in Sweden and New Zealand.

Anecdotally, some banks that have taken their time to get it right have quickly moved from being perceived as behind the curve in launching innovative second-generation products.

In an average four-week period in late 2013, 59 per cent (11.2 million) of Australians aged over 14 used Internet banking at any financial institution. These figures are based on the findings of a Roy Morgan Consumer Single Source Survey.

Although access via the website is still the preferred internet option, conducting banking using an app on a mobile phone or tablet is catching up, with five million (26 per cent) bank customers using this method of access in an average four-week period.

In the six months to July 2013, more than half (56 per cent on average) of the customers at each of the Big Four banks in Australia conducted internet banking using the institution’s website or app in an average four-week period, while less than a third (31 per cent on average) used a branch.


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