Mobility Facilitates the Distribution of Banking Services in Middle East and Africa, according to IDC
Dubai, July 11, 2012 – While financial institutions seek to develop alternative channels as a means to drive business efficiency and a better customer experience, an increase in consumer mobility has presented an attractive opportunity to financial institutions. According to a recent study by market research and consulting company IDC, the current penetration rate of banking services in the Middle East and Africa (MEA) is estimated at less than 35%.
SMS usage is growing faster than Web-based and downloadable applications. While the overall trend may be minimal, it continues to drive home the fact that SMS messages are far more appealing, since they can be used by consumers without purchasing an expensive data plan. This is particularly true in the MEA region, where penetration of lower-end mobile phones is high.
"Increased device capacity and faster Internet speeds have boosted the adoption of mobility among consumers, adding to the recent success of mobile banking initiatives. Most financial institutions across MEA have adopted some form of mobile technology, which will be pivotal in capturing a large share of the unbanked market and adding to the banking experience for existing customers," says Bijen Ramdas, a senior research analyst at IDC Financial Insights Middle East, Turkey, and Africa. "Regulation in the MEA mobile banking market is yet to reach an advanced state of maturity, which should be viewed as an opportunity to create sound security policies and develop trust in mobile banking technology."
Financial institutions looking to differentiate their mobile solutions may view item capture as a way to expedite everything from making deposits to completing loan applications. According to IDC, financial institutions should continue to embrace all mobile phone features to facilitate transactions and provide superior customer service.
Security authentication standards are stringent on mobile devices, with features such as two-factor authentication being the norm. A lack of consumer knowledge has been commonly cited as the reason for security breaches via mobile channels, rather than the actual hacking of mobile devices. In response to this, a strong trend has been an increase in focus on boosting consumer awareness and education levels, with many banks emphasizing security in their marketing strategies.
About the research
IDC Financial Insights' Transforming Banking with Mobility in Financial Services study (IDC #ZFI03U) examines the concept of mobility within the context of MEA financial services. An overview of the current landscape is briefly considered, followed by an outline of IT spending trends in the region. This document provides a view of mobile device trends in MEA, some of the key features software vendors currently offer, and a summary of key considerations financial institutions will need to address in developing their respective mobile strategies. Mobility initiatives in financial institutions across the region are gaining in popularity, and this is demonstrated with a few notable examples from across the MEA region.
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