Wednesday, April 6, 2011

Mobile Banking and Payments: Value Beyond Payments

According to Doaud Fakhri, a retail banking analyst at the Datamonitor consultancy, the mobile channel could be the main channel to market for a number of different financial services in future years. Credit smart phones for driving mobile banking.

Accenture studied 10 banks involved in mobile financial services from across all regions of the world and concluded that when banks enable their customers to use a mobile device to check balances, transfer money, pay bills, apply for credit or use personal finance management apps, they can achieve large returns on investment.

One Middle East bank got a a 300 percent return on investment by educating its two million customers how to use new services to pay bills online using their mobiles. A European bank whose customers can check balances, initiate transfers and trade stock achieved a 60 percent growth in mobile banking consumers, while one in Asia got a return on investment of 230 percent by moving to interactive online services, away from text messages.

The point is that the business value of mobile payments, banking and person-to-person payments extends far beyond the transaction value that underpins some business models. In some cases, existing providers, such as banks, might find that operating efficiencies, customer growth and retention and revenues from traditional services can provide the return on investment.

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