In a recent study of over 50,000 U.S. residents, the Federal Reserve discovered that mobile banking is on the rise, and growing at a dramatic rate. With the most popular actions being checking balances, transferring money between accounts, and push notifications, the American consumer is starting to adopt mobile banking in a big way.
Mobile money is being embraced widely
No one can doubt that consumers are starting to embrace the concept and actuality of mobile money. In the report from the Federal Reserve, it was revealed that there is a huge opportunity for the “unbanked” population to finally get the chance to obtain some form of cashless payment option using a mobile wallet. 90 percent of the “unbanked” have mobile phones, with around 73 percent of those being smartphones. However, less than half use them for mobile payments and online transactions.
Economic and social development due to mobile services
Mobile services are now contributing to a widespread development of economic and social actions around the world and is able to provide those without a bank account with a way to make online and cashless purchases anywhere in the world. According to a mobile economy report from the GSM Association (GSMA), there are over 270 live mobile money services in 90 countries around the globe.
Reasons why mobile banking will continue to grow
The major new focus for established and startup companies as well as the governmental policy makers involves facilitating better access to payment providers in order to boost the competition within the mobile money services market. They are also looking at being able to create a greater choice of options for the consumer within the mobile market. Everyone has bills to pay, needs to buy goods or pay for services, or send money to friends and family. According to CEO and founder of RecargaPay, Rodrigo Teijeiro, “Mobile banking eliminates the need for consumers to visit an ATM, take out cash, and redistribute it. They are no longer required to bother with kiosks or cash point top ups.”
Around 94 percent of mobile bankers use their mobile devices to check things like account balances or recent transactions. However, in today’s world of push notifications, many consumers do not even need to do that. A quick setup and the details are sent to your mobile as a text message after every transaction or at predetermined intervals, or when their account balance is low. Even suspicious activity is now notified by SMS. This has led to the modern consumer being more proactive and keeping a constant account of their spending and account balances. With more scammers trying to get their hands on your money, mobile banking means you can keep a close eye on personal finances, and be alert for fraudsters trying to obtain banking information. Consumers are empowered through the mobile banking technology to check balances frequently, and avoid the nuisance that can be caused by overdraft fees, payment fees, etc.
We now live in what can only be termed a “sharing economy”. Everything from transport to lodgings, and now even consumer finance, has been affected, and the modern peer-to-peer (P2P) commerce it turning the traditional banking system on its head, with crowdfunding, social commerce, P2P insurance, and P2P payments and transfers. The modern P2P payment platform is designed for continuous upgrade. Banks are being challenged by the services that provide mobile top-ups, mobile wallets, and complete financial services. With the mobile services being more agile and adaptable, banks are beginning to look at ways in which they can compete, and there is a potential for banks to start providing better, and cheaper, services to the current unbanked population. Mobile platforms can serve their customers at lightning speed, and launch updates in real-time, making them more effective than traditional banks.
Next to the Baby Boomers, Millennials are the largest group of modern Americans, and they have a major impact on both financial and social economies. From when they intend to get married to what they want in a workplace structure, not to mention their political influences, millennials are under constant scrutiny by both financial institutions and consumer study groups. The Millennials are the ones who were most affected by the financial crisis over a decade ago, and this has created an innate distrust of the traditional financial institutions since they were the major players involved in the crisis. Millennials are not interested in banks and financial advisers, and with the wealth of information available on the Internet, they are easily able to obtain the knowledge through their own research.
Consumers want instant gratification and convenience of actions, and with the steady increase in mobile devices and the Internet of Things, you can expect mobile banking platforms to see exponential growth over the next few years.
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