What is the future for mobile banking in the US?

Although the need for mobile banking has gained recognition, international banks in Asia and Europe are still miles ahead of the US market.  We turned to our panel of Zintro experts and asked them to share their opinions for why the US is lagging behind. Here’s what they had to say:

Imad Chishti, project manager for the launch of one of the biggest branchless banking services in Pakistan, feels that the “revolution” has just begun for mobile banking, and it has the “potential to transform many areas of conventional banking especially payments, disbursements, remittance, cash outs.” Soon enough, Chishti says that commercial banks will race towards mobile banking, creating a new era of shopping centers that allow payment through mobile phones. This is the focal reason for why Asian and European markets are so far ahead in the mobile banking race; they are the first ones to acknowledge the need to adapt this technology. Specifically, Asia is leading the path because of the “desperate need to bring massive unbanked population in to the banking net because of the lack of infrastructure facilities in most areas in Asian markets and banking institutions.” Chishti also points out that the growth of microfinance in Asian markets has played a significant role in actualizing the potential for such an initiative.

Wayne Steiger, a leading expert on the subject of credit card fraud, says that a mixture of higher government regulation and a lack of confidence in mobile banking technology have kept the US market lagging behind international markets. Steiger explains that until now, banks have viewed mobile banking with a degree of skepticism. However, banks are starting to understand that mobile banking offers a new revenue channel, and an opportunity to gain and keep customers. Steiger perceives that banks realize that there are new fees that can be gained from mobile banking, which is why banks are now aggressively introducing new mobile services. Further, Steiger understands that the real players in this market are those under 30 years because they are “more accurately forcing changes and the banks know this, which is why you will see more changes and services coming in 2011.” Steiger believes that in the world of mobile banking, something new to watch for is RDC (Remote Capture Service), a technology that allows a customer to take a picture of a check and make a deposit without going to a bank. This technology has been introduced primarily because “it is a win for the bank; reduced costs, fewer employees, instant transactions a real win-win for everyone.”

Jeff Schiebe, a global executive with more than 30 years of sales and international marketing experience in high technology companies, says that there are two major reasons for the advancement of mobile apps in Asia and Europe rather than the US. First, these countries are not tied to the big telecommunication infrastructure that exists in the US. Second, Asia and Europe uses SIM based apps that could be deployed and controlled by the operator. Schiebe reveals that even emerging markets like Africa are ahead of the US in mobile banking because the mobile phone provides a banking vehicle where there are no ATMs or even bank accounts. Hennie Palm, an expert with extensive business knowledge of analyzing the ways to improve the performance of a company, narrows this idea further. Palm understands that instead of comparing the US market directly to the Asian market, it is important to first distinguish successful mobile banking projects from failures. In addition, Palm remains skeptical over how the industry defines success verses failure, referencing the “success stories that turn out to be hot air once serious metrics are obtained.”

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