Over 2 billion consumers worldwide will have used their mobile devices for banking purposes by the end of 2021, up from 1.2 billion this year, Juniper Research predicts.
Growth in mobile banking is being driven by consumer adoption of banking apps the changing way consumers manage their finances, the research firm said.
The study found that the number of mobile banking logins are now exceeding that of internet banking logins in many markets. For example, the BBA (British Trade Association for Banking) announced that banking app logins in the UK reached a record 11 million per day during 2015, compared to 4.3 million internet banking logins during the same period.
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 found that banks are becoming increasingly concerned that their market position is being undermined by tech companies and pure-play vendors enabled by technology and regulations to enter the marketplace.
Additionally, by 2017, banks in the EU will be compelled to open their APIs. This will result in many innovative new products that analyze (with permission) user data to create more attractive financial services for customers.
“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,” research author Nitin Bhas said.
“However the challenge here for new players is to increase market share and maintain profitability in the long-run.”