Mobile Banking in the UK: Sizing the Market Opportunity

NEW YORK, Jan. 17, 2013 /PRNewswire/ -- Reportlinker.com announces that a new market research report is available in its catalogue:

Mobile Banking in the UK: Sizing the Market Opportunity

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The rapid growth and development in mobile banking is arguably the most important service-related trend in retail financial services at present. Mobile offers providers a huge opportunity not only to improve the quality of their relationships with their customers, but to differentiate themselves from their competitors. Discover how big the mobile banking market in the UK is, and how much it will grow in 2013. Understand how the UK marketed is segmented with respect to users and non-users of mobile banking. Learn what strategies will provide most effective in increasing levels of acquisition, loyalty, and profitability for each segment. Nearly 10 million UK consumers currently use mobile banking, and this is expected to grow by nearly half by the end of 2013. The mobile channel will allow banks to develop deeper relationships with their customers. There will be a positive impact on customer acquisition and loyalty, as well as increase opportunities for revenue generation. Innovators, those who use mobile banking every day, are a profitable but demanding segment. They are the happiest to use paid-for services, but are least loyal of all consumers. Banks should promote the time-saving qualities of mobile, allowing loan and overdraft arrangement via this channel, and allow full customization of mobile services. Mainstreamers, non-users who are the most likely to take up mobile banking in the near future, are looking for simplicity and ease of use on mobile. They are the least likely to use one provider for all their products, so mobile can be used to provide integrated management of all holdings, increasing the incentive to keep to one provider. How many UK consumers currently use mobile banking, and how many will do so in 12 months' time? What strategies can your organization employ to maximize the potential of the mobile channel? How can you use mobile to improve acquisition and loyalty rates, and boost revenues and profits?

OVERVIEW

•Catalyst•Summary•Methodology

SIZING THE MARKET OPPORTUNITY

•Introducing the opportunity - What is mobile banking?- Datamonitor's mobile banking segmentation model explained- The popularity of smartphones has made mobile the fastest ever growing banking channel- Consumers increasingly view mobile as an essential channel- The provision of mobile banking services is rapidly advancing- A targeted mobile strategy can bring a number of key benefits to providers

•Mobile will encourage greater engagement between banks and their customers - Mobile banking will reach a wider audience than online banking

- Non-digital channels will be freed up for more value-added activities

- Banks will need to deal with fraud quickly and effectively to reduce brand damage

- Soft benefits to bank brands are real if less tangible benefits of mobile banking

•The shift to mobile will allow banks to cut their operating costs… - …but only to a certain extent- Mobile will allow consumers extra options for dealing with their providers- Banking apps can provide banks with concrete benefits at all stages of mobile evolution - Banks can directly track the return from a banking app on both sides of the balance sheet

•Mobile has become another differentiator between providers’ offerings - Mobile banking gives access to previously unreachable customers

- Time pressures on consumers increase the appeal of the mobile channel

- Mobile has the potential to overtake the online channel in banking

•Small screens create a new challenge for marketers, which must optimize content for this channel - Mobile allows consumers to react quickly- Mobile users are a captive audience- Location-sensitive information offers additional depth to the mobile channelMAXIMISING THE OPPORTUNITIES•The present state of the UK mobile banking market - 9.6 million UK consumers currently use mobile banking- The UK mobile banking market is expected to grow by 47% in 2013- Security fears are the number one priority for banks to address- Providers must educate consumers on the role that mobile banking can play

•Current shape of the UK market - The UK mobile banking market at a glance

- NatWest customers are currently the biggest users of mobile banking in the UK

- Most UK providers now offer basic mobile banking functionality across a range of access methods

•Providers must employ distinct mobile strategies for each segment - Summary of key mobile strategies for each consumer segment

•Innovators are a profitable but demanding sector of the market - Innovators: key findings and recommendations

•Innovators will be attracted by flexibility and information provision within mobile - Publicizing the scope for the greater individualism afforded by mobile will attract this segment- Providers can use mobile to inform innovators about investment and pension products- Mobile is an ideal channel for distributing loan products to innovators

•Innovators are a valuable source of revenue for providers - Innovators are very willing to pay for enhanced banking services

- Innovators will appreciate being able to manage their overdrafts by mobile

- Innovators are less loyal but more profitable than other consumers

•Innovators are looking for time-saving and ground-breaking products - Providers must stress the time-saving advantages of mobile to innovators- Providers have to keep updating and modernizing their products and services to retain innovators

•Early adopters offer clear opportunities for revenue generation - Early adopters: key findings and recommendations

•Early adopters seek comprehensive servicing via mobile - Early adopters want products and services that adapt to their needs- Early adopters will be receptive to mortgage servicing via mobile

•Early adopters are both loyal and profitable - This segment is also capable of generating strong revenues based on sales of paid-for services

- Early adopters will benefit from being able to view and manage all their products via mobile

•Early adopters want access to sufficient information to make their own decisions - Banks should increase the provision of information and advice through their mobile channels- Early adopters are keen on customization and innovation in product offerings

•Mainstreamers need just a little more persuasion to adopt mobile - Mainstreamers: key findings and recommendations

•Mainstreamers will appreciate access to advice and planning services - Banks can promote their financial planning capabilities via mobile to these consumers

•Mainstreamers can become a more profitable segment through the use of mobile - Comprehensive mobile provision could increase mainstreamers' propensity to pay for services

- Providers can use mobile to increase the number of products that mainstreamers hold with them

•Mainstreamers will value simplicity of use as the most important mobile attribute - Mainstreamers want to go mobile- Mainstream consumers are looking for basic but effective mobile provision

•Laggards and refuseniks can be won over to mobile by focusing on ease of use - Laggards and refuseniks: key findings and recommendations

•Laggards and refuseniks are limited by their willingness to accept new technologies - These segments are profitable to banks on the basis of their existing wealth- Providers can form partnerships with telecoms providers to subsidize smartphone ownership

•Laggards and refuseniks need significant incentives to be persuaded to engage - Mobile can be used to promote strong relationships with these consumers

•Mobile has to be marketed to these segments on the basis of ease of use above all other factors•Staying ahead of the mobile game - Out-of-the-ordinary features will add immense value to the mobile channel- Banks need to offer more than one app to cover the variety of services that can be provided via mobile- Innovators and early adopters are looking for maximum flexibility and sophistication in mobile provision- Mainstream consumers desire solutions that maximize convenience- Laggards can be persuaded to adopt mobile by focusing on simplicity

APPENDIX

•Definitions - App- Personal finance management- Remote deposit capture- Smartphone

•Income band definitions from dashboard

•Methodology - Overall methodology

- Financial Services Consumer Insight Survey

•Sources•Further reading•Ask the analyst•Disclaimer

TABLES

•Table: Income bands included in the Mobile Banking dashboard

FIGURES

•Figure: Datamonitor's segmentation of the mobile banking market•Figure: The use of mobile varies considerably on a global basis•Figure: Consumers have rapidly taken to the latest mobile communications devices•Figure: Smartphone ownership in the UK has risen nearly fourfold since the start of 2010•Figure: By 2015, consumers will conduct most day-to-day banking activities via mobile devices•Figure: Migration to mobile channels offers huge opportunities for reducing operating costs•Figure: Daily users of mobile banking in the UK are the most frequent users of all other channels•Figure: Mobile banking evolves in three different stages, each bringing additional benefits•Figure: Mobile banking offers far more on the revenue-generating side of the business than the cost minimizing side•Figure: There are 9.6 million mobile bankers in the UK•Figure: Summary of mobile banking demographics in the UK•Figure: NatWest is the most successful UK bank in promoting mobile banking at present•Figure: Virtually all UK banks now offer basic functionality across a range of access methods•Figure: Summary of strategies for promoting mobile banking to each segment•Figure: Innovators are youthful high earners•Figure: Services that will only be used occasionally have the greatest potential to improve the banking relationship

Companies mentioned

CMS Energy Corporation, General Mills, Inc., Hutchison 3G UK Limited, Ipsos SA, Royal Bank of Scotland Group PLC, Shanks Group plc

To order this report:Online_Banking Industry: Mobile Banking in the UK: Sizing the Market Opportunity

Nicolas Bombourg

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