Mobile banking users to reach 2bn by 2020
Over 2 billion mobile users will have used their devices for banking purposes by the end of 2021, compared to 1.2 billion this year globally, representing more than one in three of the adult population.
This is according to Juniper Research's recent report, Retail Banking: Digital Transformation & Disruptor Opportunities 2016-2021, which notes growth in mobile banking is being driven by consumer adoption of banking apps and the changing way consumers manage their finances.
KPMG in its Mobile Banking 2015 report, says the growth of global mobile banking users is in an exceptionally rapid phase. It expects to see exponential growth of mobile banking in the next five to 10 years before ubiquity flattens the growth curve.
Frost & Sullivan says 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.
In 2015, Africa and the Middle East had 235 million registered mobile money users, representing the largest share of the global market, says Juniper Research.
Ericsson Mobility report says Africa is expected to reach 100% mobile penetration by 2021 and is, therefore, one of the largest markets for mobile subscriptions.
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, says Dark Fibre Africa.
Juniper Research says the number of mobile banking logins are now exceeding that of Internet banking logins in many markets.
For example, the British Trade Association for Banking announced that UK banking app logins reached a record 11 million per day during 2015, compared to 4.3 million Internet banking logins.
Meanwhile, a recent consumer survey conducted by Juniper Research found that around 65% of mobile banking customers in the US and the UK use an app to conduct banking services.
The report also says banks are becoming increasingly concerned 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 have received licences or launched services in 2016, including Starling, Tandem, Atom, N26, and Monzo, with around 20 banks currently in talks with regulators to receive a licence, notes the report.
Additionally, by 2017, banks in the European Union will be compelled to open their application program interface, says Juniper Research.
This will result in many innovative new products that analyse (with permission) user data to create more attractive financial services for customers, it says.
"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," says research author Nitin Bhas.
However, the challenge for new players is to increase market share and maintain profitability in the long-run, adds Bhas.