The Importance of Mobile in Financial Services

Mobile-and-payments

The eco-system of financial services is undergoing an incredible transformation. One of the most important factors influencing this transformation is the continued adoption of mobile technology. People are using mobile as an integral part of their day-to-day lives and as a financial service aggregator, you need to get on-board.

In the recent years, mobile has contributed a positive impact across various financial services, with consumers shifting away from traditional practices. Mobile First solutions are cost-efficient, reliable and secure as sending money has become as easy as sending a text or making a phone call. Mobile First is at the center of transformation taking place across various key financial sectors such as:

  • Banking
  • NBFC
  • Insurance
  • Payments/Wallets

What is Mobile First?

Mobile first has become a popular trend, but what does mobile first mean? Mobile First is simply designing an online customer experience for mobile before designing it for the web or any other website.

In the past, when the consumer’s focus was on the desktop, mobile design was an afterthought. But today, people are using their mobile devices for accessing various financial services and social networking than ever before.

Statistic Speaks

Mobile penetration is one of the most emerging markets and one which is showing no signs of any slowdown. This is one of the market which is growing quickly, in the developing as well as in the developed countries. As per the International Telecommunication Union, the total number of mobile subscriptions has reached almost 6 billion, equivalent to a global penetration of 86%.

Today India boosts the second highest number of mobile users across the globe. The country has also now the world’s second largest smartphone market, having overtaken the US in the first half of 2016.

What makes mobile a catalyst for financial services?

With the rapid growth in the user base, mobile today has increasingly become an important medium to reach the unbanked. It has the potential to create value on multiple fronts and improve the entire financial eco-system across sectors such as:

Banking & NBFC: Adoption of Mobile First approach in the banking sector can lead to significant cost advantage in the distribution of financial services. Mobiles allow banks to do their business more cost effectively. With the help of mobile platform, reaching to a broader population becomes feasible, thus enabling financial inclusion. M-Finance helps expanding operations in remote or sparsely populated rural areas due to high penetration of cell phones.

For example: A migrant worker can avail emergency loans without going back to money lenders if the financial services reaches at his doorstep swiftly.

Insurance Sector: According to a study conducted by LIMRA, nearly 86 percent of consumers prefer to research online about insurance policies. Also it was noted that one in every five searches for insurance globally, is from mobile. Mobile can definitely help insurance sector in tackling the challenges of mitigating risk, increasing productivity and enhancing customer experience. Through mobile marketing, Insurance companies can attract new customers and regain former policy holders.

M-Payments & Wallets: There are nearly two billion people across the globe that don’t have a bank account, out of these 1.7 billion have a mobile phone. Therefore it draws a huge potential for financial institutions to cater to such a potentially massive market.

Today Mobile money or M-Money has successfully substituted ATM and cash transactions across various countries globally. Almost all major banks, and many smaller banks, now offer some form of mobile banking application to support customers’ demands to be able to interact with their financial accounts anytime.

Banks are today well-positioned to leverage their position of trust by increasing the perceived value through various payments systems such as UPI, Wallets, NEFT, RTGS and IMPS. Mobile has the ability to create value for consumers at large and this is an exciting times where you should integrate mobile platform into your financial delivery systems aggressively.

Also read our blog on Five Social Media Marketing Trends to Watch in 2017. Stay tuned with PayUmoney Knowledge Platform and take your online business to next level.

Author: Arun Agrawal

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