Mobile banking and payments set to take off in the UK


The mobile banking and mobile payments battleground in the UK is heating up as industry players manoeuvre into position to take advantage of the opportunities.

This is according to a report commissioned by digital banking provider Intelligent Environments (IE), which investigated the views of mobile strategists within companies at the forefront of mobile banking and payments services, such as O2, Microsoft and Lloyds Banking Group.

In 11 one-to-one interviews, conducted by IE, participants said that with significant investment going into the mobile banking and mobile payments infrastructure for the 2012 London Olympics, the games are poised to provide a pivotal moment in the delivery and adoption of mobile financial services in the UK. As a result, a quarter (3) of respondents stated that mobile financial services will hit mainstream in 2013 while a third (4) claimed that the tipping point would come in 2015.

Of all the industry sectors vying for a slice of the pie, the IE report found that it is the mobile operators and technology providers that are pushing developments and being most proactive in this market. Banks, such as Barclays, NatWest and Lloyds, have been making waves in this space but on the whole financial institutions have been somewhat behind the pace. This is largely due to the turmoil that the financial services sector has experienced over the last few years, with a third (4) of respondents stating that complying with increasing regulation is a priority for banks at the moment.

However, despite the roll out of recent mobile banking and mobile offerings, such as Barclays Pingit, only one respondent believes that to date the UK has been faring well in its delivery of mobile financial services compared to the rest of the world while none believe the UK is at an advanced stage in its development of mobile banking and mobile payment offerings. In particular, two thirds (7) of the respondents said that the mobile payments ecosystem in the UK is currently still in its infancy.

Challenges that are hindering the progress and adoption of mobile banking and mobile payments services in the UK are perceived security risks, according to nine of the mobile specialists interviewed, and a lack of pioneering solutions from the industry, say a third of respondents (4).

Andrew Tobin, chief technology officer at O2 Money, commented: ‘Like any new technology, there will be a learning curve and a growth in acceptability. But all the key signs of a quickly growing market are there, from consumer research to the scarce availability of knowledgeable staff. As a result, the level of activity is increasing amongst banks and mobile operators in Britain.’