Financial institutions in Asia are increasingly turning their attention to the potential of mobile banking as channel diversification accelerates in the banking industry. With the spread of smartphones since 2010, the importance of mobile banking has increased tremendously and today, operating a mobile banking channel has shifted from a choice to an imperative.

An online survey conducted by Celent targeting 14 countries found that mobile banking continues to make inroads, but has yet to be embraced and used by consumers. However, the importance and profile of mobile banking are only growing, and mobile banking as a channel is expected to expand.

Many banks indicated that they are actively pouring money into mobile banking and that 72% of the respondent banks reported spending US$10 million or less on mobile banking technology annually. Another 75% of the respondents said they are considering increasing their mobile banking IT spending and this is largely driven by higher transaction volume.

The survey showed that 55% of the banks reported between one million and 10 million registered mobile banking users and a total of 45% reported averaging fewer than 100,000 mobile banking transactions daily.

Celent said banks across the board are enjoying a rise in mobile banking transaction volume, and from the survey, it is evident that they anticipate further growth. In addition, 63% said that plans to expand their service menu offerings were driving increases in mobile banking IT spending. Another driver was competition from other banks.

Many banks, Celent pointed out, see enhancing their mobile banking offerings as a way to boost competitiveness in the future. This might be regarded less as a way to enhance competitiveness than as an essential means to ensure survival.

Also cited as factors in higher IT spending on mobile banking were revisions to regulations and fraud, which showed that external factors are making deployment and renewal of mobile banking systems imperative.

An issue for banks is what type of vendor to partner with when introducing a mobile banking system. Among the respondent banks, 56% reported using top-tier vendors, 25% medium-size vendors and 19% small vendors. Celent said banks do not always rely on vendors with which they have existing relationships with medium-size and small-size vendors with expertise in mobile software.