Internet banking is now taken for granted by many people, who may be relieved at not having to visit a bank branch or use a telephone call centre to undertake many banking transactions. Mobile banking (m-banking) is probably ten years behind Internet banking in its development. In ten years’ time, will we be taking mobile banking similarly for granted? Whenever any new banking technology comes along, there are sceptics who doubt that the new technology will catch on with the public. When ATMs first appeared, many people thought they would never be popular because people liked to go into a branch and deal with a human being. In the late 1990s when the Internet was only beginning to catch the public’s imagination, doubters expressed major concerns about privacy, security, download speeds and access to the Internet. When Egg bank launched its then revolutionary online banking service in 1998, even Egg itself turned out to have been unduly cautious as prospective customers appeared in unexpectedly high numbers, crashing its servers and swamping its telephone lines. 

Mobile phones have become an essential part of our lives. We use our mobile phone to check e-mails, get news updates, browse the Internet and connect with friends via social networks, as well as using it as a personal organizer, as a camera and as a music player to consume and share music, pictures, games, ringtones etc. A number of people keep their mobile phones with them at all times, even in the bathroom, and are unable to ever turn it off. A study by SecureEnvoy found that in 2012, 66 per cent of the UK population admitted the fear of being without their mobile phone - called ‘nomophobia’. Especially, young adults between 18 and 24 years tend to be most addicted, with just over three-quarters unable to stay separate from their phones for more than a few minutes (SecureEnvoy, 2012).

But what is happening with mobile banking? 

More recently, high hopes have been held for m-banking, following the more general development of mobile commerce, which in turn has been helped by the appearance of sophisticated, easy-to-use smartphones such as the iPhone. M-banking enables customers to access their bank accounts through mobile devices to check their balance or to conduct financial transactions. The range of services that can be undertaken while mobile is likely to increase, and many have suggested that mobile phones are likely to evolve as ubiquitous payment devices, allowing a mobile phone to be used in a similar way to a credit card (Wilcox, 2009)..........

Case study review questions.

1. Discuss the causes of uncertainty in forecasts of levels of consumer adoption of new-technology based services such as m-banking. 

2. Identify methods by which a bank could seek to improve the accuracy of its forecasts of take-up of m-banking. 

3. Discuss the concept of a ‘tipping point’ in the adoption of new technology-based services. What factors do you consider would contribute to a tipping point for m-banking? How is this likely to differ between Western and non-Western countries?