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Mobile Banking surges as Emerging Markets embrace mobile finance

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Global use of mobile finance surged in the past year as the spread of new technology and mobile banking infrastructure drove a huge increase in take up rates around the world, according to new research from TNS.

In countries as diverse as China , Brazil and Kenya the number of new users of mobile banking soared over 100% in 12 months, as banks leapfrogged traditional service models and moved directly to mobile. The increases were not restricted to emerging markets alone though: take-up rates also surged in the UK, USA, Singapore, South Korea and Sweden where banks offered customers new services via their mobile handset.

Analysing the findings, James Fergusson, Global Technology Sector Head at TNS, said: "Mobile finance technologies have the tremendous capacity to be transformational in rapid growth markets, empowering consumers by giving them greater access to financial services."

"The necessity, marked interest and the blossoming mobile finance infrastructure means that countries such as Brazil and China have the right ingredients to drive mobile finance growth, not just in their own markets, but globally as well."

The research has been released as part of TNS Mobile Life, an annual report on mobile consumer usage, and reveals a wealth of opportunities for banks, retailers and mobile service providers to develop for existing and potential customers. 

Percentage increase in mobile banking usage from 2010 to 2011

Country Percentage of consumers using in Increase
2010 2011
China 10% 25% 150%
Brazil 10% 21% 110%
Kenya 6% 18% 200%
USA 11% 22% 100%

In the UK the proportion of people using mobile banking increased from 9.7% in 2010 to 20.4% in 2011, while in the USA the rates from 11.4% to 21.9%. In Sweden it was greater still: 8.1% to 20%.

And while adoption rates increased, desire for mobile banking in areas where it is not widespread is strong, peaking in sub-Saharan Africa , where almost two-thirds (63%) of mobile owners expressed an interest in mobile banking.

Bob Neuhaus, Global Finance Sector Head at TNS, said:  "A significant proportion of the world's population does not have access to banking services. Making mobile banking easy to access in these markets will not only help create a more sophisticated consumer marketplace and drive development of the banking sector, but also provides a huge opportunity for the mobile industry."

"Our insights from the Mobile Life study demonstrate that in more mature markets, mobile banking is simply a matter of convenience, and largely an extension of the PC online experience - allowing the same online convenience, while mobile; however in developing markets mobile may provide an entry point to banking for millions of 'unbanked' people, in countries where banking infrastructure is poor, and banking restrictions create barriers."

Emerging markets outpace the West in usage and demand for mobile wallet

Mobile money extends the concept by turning handsets into mobile wallets, capable of being loaded up with and storing money. As well as delivering new services in developed markets, mobile wallets can bring people without bank accounts (the unbanked) into the wider financial world and help drive economic and social development. The Mobile Life research shows that mobile wallet adoption has more than doubled across emerging markets, as they take advantage of the new opportunities it offers - a much higher take-up rate than in developed countries.

TNS Mobile Life demonstrates that developed countries such as the USA , Singapore and Hong Kong have made minimal progression in mobile wallet adoption over the past year. The USA moved from 6% in 2010 to 8% in 2011, Singapore increased from 10% to 13%, Hong Kong from 16% to 17%. In contrast, mobile wallet usage in Chile was below 1% in 2010, but has risen to 7% in 2011 - just one percentage point below the USA and higher than Australia (6%), France (5%) and the Netherlands (5%).

China driving global mobile finance growth

The increased adoption and demand for mobile finance in China present a huge opportunity for companies to reach new customers. The financial services that capture the highest interest in China are paying bills (25%), getting money out of the bank (15%), and receiving wages (15%). China 's usage of mobile wallet is already a considerable 52% above the global average and fewer than a quarter (23%) of Chinese consumers say they are not interested in mobile wallet.

"The past few years have shown us the tremendous potential for emerging markets to 'leap-frog' more developed markets in adopting new technology. Our findings from this research suggest that the uptake of mobile banking services is set to follow this trend," comments Fergusson. He concludes, "In countries across Sub-Saharan Africa, Latin America and Emerging Asia where there is high mobile phone prevalence, the lack of robust financial services and a need for efficient payment methods has contributed to very strong appeal for mobile finance. It's a logical fit."

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