MANILA, Philippines - Adoption of mobile banking technologies can lead to lower operational cost, and higher revenue flows for banks.
According to KPMG, banks estimate a 5.6-percent reduction in branches as a direct consequence of their mobile banking strategy, with an associated 10-percent reduction in costs and six percent revenue uplift.
KPMG is one of the largest professional services companies in the world.
The Global Mobile Banking Report finds that while mobile is already the largest banking channel by volume of transactions, its adoption by new customers is now entering an exceptionally rapid phase.
The report warns the banks who do not have clear mobile banking strategies will lose customers and cross-
selling opportunities in the short-term, as well as risk jeopardizing competitive advantage.
To take advantage of the surge in mobile banking, KPMG believes banks should investigate the potential of value added services, suggesting that virtual customer support can bring the personal touch of a branch to a handset.
KPMG’s UK digital and mobile banking head David Hodgkinson said mobile banking is clearly supplanting all other channels as the main portal between the bank and the consumer.
“Banks must overcome substantial infrastructural challenges, and reconcile consumers’ appetite for ease of use with greater security. Boldness will be required to overcome these challenges, and the only sure-fire winner will be the consumer,” Hodgkinson added.
Banks need to tread carefully, however, for fear of invading what the report calls ‘device intimacy’ by bombarding customers with unwanted sales pitches.
Instead banks should seek to offer ‘personalized support’ supplemented by added value features, such as social media sharing and cloud storage.
They should also invest in up-and-coming mobile-enabled technologies, such as wearables, and augmented reality as they proliferate, and provision APIs to the developer community to expand the innovation opportunity.
The UBS analysts and KPMG surveyed 67 bank management teams in 18 countries.
“We believe mobile banking will be a transformational technology in the future and the businesses that are more committed to this technology are likely to see the most benefit in the years ahead,” it added.