While a plethora of financial institutions continue rolling out mobile-friendly tools for on-the-go customers, a recent study from Amdocs discovered that more than 68 percent of respondents are not using mobile financial services, suggesting fundamental issues such as security concerns and lack of awareness still abound.

Amdocs, a customer experience solutions provider, undertook a global survey to more closely examine the fledging adoption rates of financial services for smartphone users. It discovered that the next phase of growth for the industry will likely stem from innovative solutions for insurance, savings and loans, which may prompt consumers to combat their security woes and concerns about ease of use.

“One finding that surprised us was that there wasn’t that wide a discrepancy between the emerging markets and the mature markets on many of the parameters – especially on the key inhibitors for growth (like security, and use of personal data) and the key drivers for future usage (ubiquity, ease of use, increased security in most cases),” said Sharath Dorbala, vice president, head of products, sales and marketing and mobile financial services at Amdocs.

“But here’s what was even more surprising: we found that even in many emerging markets where there have been widespread and extensive awareness and marketing initiatives and where there is a great market need, there are a substantial number of people who either aren’t aware or not using mobile financial services. More needs to be done to spread the word.”

Addressable challenges
Amdocs’ study confirmed that consumers who do use mobile financial services appreciate the convenience and ubiquity they offer. The ability to conduct time-saving tasks such as mobile banking and investing on smartphones provides immediate and tangible benefits to users who are aware of these capabilities in the first place.

However, despite some positive progress, the research also showed that lack of awareness of mobile options is still a major concern for financial marketers. Additional fundamental issues include consumers’ security concerns and worries about the ease of use.

Seventy-three percent of respondents in emerging markets do not leverage mobile payments and other financial applications or are unaware of their existence, as opposed to 62 percent of consumers in mature markets. Therefore, misperceptions about mobile services as well as a startling lack of market awareness are two key issues that financial institutions must strive to combat in the near future.

“Focus on the key benefits mobile financial service provide: how much easier it is to capitalize on ubiquity, enhancing loyalty and providing an omnichannel retail experience (all of which were shown to be key in the survey) when you have an omnipresent device at hand,” Mr. Dorbala said.

“But just as importantly, marketers need to address the key concerns that respondents mentioned – such as security.  The survey found many misconceptions in the marketplace regarding how payment transactions are handled on mobile devices – in essence, many of the many of the safety and security parameters that were seen to be problematic are actually due to a lack of understanding of how mobile wallet technology works.”

Thirty-one percent of consumers in emerging markets claimed they were unaware of financial apps or mobile services, a notion echoed by 23 percent of respondents in mature markets. Therefore, the importance of raising awareness for financial services on smartphones cannot be overstated.

“The digital banking needs of consumers are becoming more complex, and financial institutions need to invest in new digital offerings that provide the flexibility to better customer’s needs and provide a consistent experience across all channels,” said David Albertazzi, senior analyst at Aite Group, Atlanta. “Potentially look at other industries such as the retail sector and learn from it.”

Next-level growth
Amdocs believes that payment, loans, savings and insurance solutions for education services and medical treatment will fuel the next growth wave for mobile financial services. This projection is supported by 25 percent of individuals admitting they are likely to use advanced mobile platforms for insurance, savings and loans within the next year.

Consequently, financial brands must pay attention to key adoption drivers, such as incentives for consumers who use their services, increased security functions, ease of use and low transaction fees.

Mature markets, including the United States and Britain, must offer compelling value propositions to consumers, while emerging markets should focus their sights on offering a range of affordable services on mobile that function as a viable alternative to traditional banking methods.

Consumers who use mobile banking services typically find them to be positive

“In the Americas and Europe, financial institutions focus on user experience and usability; they develop for smartphones and tablets and tailor the user experience to each device by leveraging native components and controls,” Mr. Albertazzi said. “In the Asia-Pacific, Middle East, and Africa, financial institutions are focusing purely on ubiquity; the mobile banking platform needs to work on as many devices as possible, including older phones.”

A springtime report from Phoenix Marketing International posited that marketers have been missing a potentially lucrative and viable opportunity to target the emerging demographic of consumers using mobile devices for financial services and payments, suggesting that these users must be understood more fully so that banks and financial institutions can garner more clients (see story).

“Go back to the basics: focus on market education and awareness that is specific to each market,” Amdocs’ Mr. Dorbala said. “Then, focus on the nuanced regional differences that matter.

“For example, in the U.S., localized rewards and incentives greatly increased customer interest to try out mobile financial services – which wasn’t the case in markets across Europe.”

Final Take
Alex Samuely, editorial assistant on Mobile Commerce Daily, New York