Banking sector's mobile conversion

Five years ago, Australia's major banks laughed at the idea of ever offering their customers mobile banking. Fast-forward to now and they are willing to do whatever it takes.

NAB’s rollout of a mobile application for Windows phones this week shows just how far banks have come in the drive to serve all mobile customers.

NAB says it received “over 50“comments via social media from customers asking for a Windows Phone offering. That’s a tiny fraction of NAB’s 12 million strong customer base, and even of its 12,000 Twitter followers.

Analyst firm Telsyte says only around five per cent of Australian smartphone users have a Windows phone, a number not expected to grow in 2012 as consumers wait for the launch of Windows 8 towards the end of the year. Of course, it helps when you have a keen vendor like Microsoft to provide the resources to get an app off the ground.

NAB says Microsoft didn’t fund the development of the app but it did contribute “technical advice and resources to the project”.

Microsoft head of business development for apps, Chris Bright, says banking has become a must-have app when people select a phone. “It’s one of the reasons we’re really passionate and really pleased to have NAB on board.”

For NAB, and the rest of the banks, mobile banking is finally hitting the big time – and despite their initial hesitance, banks have seen exponential growth (270 per cent in 12 months for NAB) in mobile banking – a far greater growth rate than experienced with internet banking. It’s the same story for Westpac (see below).


Spin the clock back to 2007 however, and despite rapidly growing smartphone adoption, banks were still unconvinced of the impending demand for mobile banking.

“At this stage we have no plans to introduce such a service,” said the Commonwealth Bank at the time, after failing to gain traction with SMS banking back in 1999.

“Our customers have, in the past, clearly indicated that they prefer to use internet, telephone and branch banking for their transactions,” was the response given to my query about mobile banking in 2007.

Today, the Commonwealth Bank is investing heavily in mobile channels, most recently with the development of its Kaching app for mobile payments.

And this time around it’s NAB that’s falling behind, despite the fact that online payments are taking off, and access to the internet is increasingly coming from smartphones and tablets, not desktop devices. NAB was the first major bank to launch iPad and Android apps in 2010, but remains conspicuously absent in mobile payments.

“We watch the space very closely and I think at this point the most we can say is we have a dedicated team working on that, so watch this space,” says NAB general manager of digital Chris Smith.

Extrapolating out current growth, NAB expects that within 12 months, 50 per cent of online banking logins will be coming through mobile and smartphones, and that in two year’s time mobile logins will surpass desktop logins.

Before that day arrives banks need to consider reprioritising design and development agendas.

Ben Forsyth, who heads up mobile and emerging technologies at NAB, says it’s a matter of when not if banks start to put mobile first.

“It’s a significant shift in the way we think about interacting with our customers and start thinking about mobile first instead of desktop first and mobile second.”

And yet it’s very clear the bank continues to funnel vast sums of money into other channels, most notably branch banking, at the expense of mobile.

Meanwhile non-bank competitors like Google, PayPal and Square and its Australian equivalents are gearing up to capture the attention of both retailers and consumers.

Perhaps Microsoft could stump up some money for NAB’s mobile payments push?

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