Mobile banking users to hit two billion by 2020

The number of people who use their mobile devices for banking transaction is expected to increase from its current volume of 1.2 billion to about two billion by the end of 2020, which represent one third of the global adult banking population.

Juniper Research recent report titled, Retail Banking: Digital Transformation & Disruptor Opportunities 2016-2021 revealed that growth in mobile banking is being driven by consumer adoption of banking apps and the changing way consumers manage their finances.

According to report, the numbers of mobile banking logins are now exceeding that of internet banking logins in many markets citing the case of British Trade Association for Banking, which announced that banking app logins in the UK reached a record 11 million per day during 2015, compared to 4.3 million internet banking logins during the same period.

Meanwhile, a recent Consumer Survey conducted by Juniper Research found that around 65 percent of mobile banking customers in the US and the UK uses an app to conduct banking services.

The Retail Banking: Digital Transformation & Disruptor Opportunities 2016-2021 report found that banks are becoming increasingly concerned that their market position is being undermined by tech-companies and pure-play vendors enabled by technology and regulations to enter the marketplace.

“For example, in the UK alone five new digital banks received licenses or launched services so far in 2016, including Starling, Tandem, Atom, N26, and Monzo, with around 20 banks currently in talks with regulators to receive a license”, the report explained.

The report added: “By 2017, banks in the EU will be compelled to open their APIs. This will result in many innovative new products that analyse (with permission) user data to create more attractive financial services for customers.”

Research Author at Juniper, Nitin Bhas while commenting on the study said that recent industry shifts highlight why traditional banks must respond rapidly to retain market share by cultivating new revenue channels and enhancing existing base through sustained innovation saying that the challenge here for new players is to increase market share and maintain profitability in the long-run.

In 2015, Africa and the Middle East had 235 million registered mobile money users, representing the largest share of the global market, said Juniper Research.

According to Frost & Sullivan, while Africa’s financial technology sector is different to that of developed economies, it is similarly poised for exponential and rapid growth that will challenge existing financial service providers.

Meanwhile, Ericsson Mobility in its report said that Africa is expected to reach 100 percent mobile penetration by 2021 and is, therefore, one of the largest markets for mobile subscriptions adding that due to this growing rate of mobile penetration, mobile banking will be the ideal solution to reach the unbanked market within the fourth industrial revolution.