Vikas Kothari
What is common to pizzas, taxis, and medicines?Â
They can all be accessed through mobile apps.
The number of services now available on a mobile phone has exploded in recent years. The year 2019, in particular, was a turning point with UPI transactions making up 73% of all debit and credit card transactions in India in 2019. This was a significant jump from just 12% in 2018, pointing to a clear preference for mobile-based financial services and payments.Â
There has been a rapid growth of mobile payments, transfers and wallets, which has resulted in banks devoting more resources to mobile banking. But these services have not managed to completely break away from traditional branch banking to evolve into an individual, digital entity.Â
So, is it time now for banking to adapt to a mobile-first generation?Â
The answer is a resounding ‘yes’ and here’s why:
Mobile is the first introduction to financial services
In developed economies, the shift to mobile phones was more of a transition from online banking. In India, however, mobile phones are often the first touchpoint for users to access and interact with banks and financial services. The digital banking journey for this segment of the population, consisting mostly of young working professionals, begins and ends with a smartphone. India’s smartphone base is estimated to reach 820 million in the next two years, according to a study jointly released in June 2020 by Indian Cellular and Electronics Association and consulting firm KPMG, and the number is only growing.Â
Mobiles are more commonly used
Mobile and internet users in India are expected to reach more than 900 million by 2023, with 46.2 billion apps being downloaded. While the sales of smartphones increase exponentially every year, the growth of laptops and broadband connections continue to be sluggish as they remain accessible only to a small percentage of the population. This is where it becomes crucial for banks to develop and offer branchless, mobile-first services.Â
Banking services to meet expectationsÂ
Traditional banking services in India continue to be bogged down by legacy systems and other infrastructural challenges. There is also a deepening chasm between what consumers expect and the services that banks offer. Mobile banking closes that gap by simplifying and speeding up processes.
Mobile banking matches customer needsÂ
Banking services traditionally offered a suite of products that the bank thought was useful to the customer. With mobile banks, the focus is entirely on the end-user. Products like loans, insurance, and credit cards are tailored to customer preferences, lifestyle, financial needs, and income. Capabilities such as these go a long way in customers seeking out mobile-first banking for a seamless experience.
Customer relationship on mobileÂ
In an October 2019 report from MuleSoft, 49% of people in the age group of 18 to 34, globally, have already changed or considered changing banks in the span of that year in the pursuit of a smoother digital experience and services. A survey by Forrester in February 2020 has revealed that the number is higher in India. At least 58% of consumers are thinking of switching banks this year due to various factors, including an erosion of trust, bad digital experience, and a lack of prompt customer service.Â
These numbers are indicative of an ever-widening generational gap between millennials and the older generation who preferred a hands-on and face-to-face approach to services.
Whether it’s the priority given to time-saving or ease of accessibility, a mobile-first approach to financial services is the need of the hour today.
Vikas Kothari
Co-founder, P10 Bank, India’s first digital bank designed for young working professionals.
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