Canada’s rapacious appetite for mobile services is transforming the face of the country’s financial industry.
Cisco System Inc.’s latest Visual Networking Index forecast predicts that Canadian consumer mobile traffic is set to grow nine-fold from 2013 to 2017 at an annual growth rate of 54 per cent. Five years from now, consumer mobile traffic is expected to reach no less than 201,086 terabytes a month, up from just 23,131 terabytes a month from last year.
As mobile activity grows, a move to omni-channel banking among financial services firms who traditionally confined themselves to kiosks and branch offices will be a critical growth sector for financial institutions, according to Shruti Jain, senior analyst for Cisco’s service provider unit.
Cisco recently mapped the World Bank’s global financial statistics with Cisco’s mobile adoption figures and found that while 51 per cent of consumers worldwide had access to a bank account, more than 57 per cent of consumers own a mobile device.
“Mobile devices can close the gap for people who have no access to a financial institution,” she says. “For businesses it’s a market they can’t afford to ignore.”
Banks are gradually growing the number of services they offer to mobile users, although regulatory measures appear be remain an obstacle.
Last November, CIBC launched eDeposit, a new mobile banking app that allows customers to deposit a cheque by simply using their iPhone or iPad camera. All the depositor has to do is to snap a picture of the front and bank of the cheque and transmit the photo to his account.
why go through the trouble of cutting a physical cheque at all? Can’t funds be transferred from one account to another via mobile devices?
“It may come to that soon enough, the technology to enable it is already available,” says Geoffrey King, lead for Cisco’s business transformation solutions division for financial services in Canada. “But for now, industry regulations around authentication, security and record keeping require otherwise.”
Still, many financial businesses are testing the mobile waters.
For instance, the typical life insurance coverage may still require a medical checkup and transaction through a representative, but a number of companies have been offering customers the option to purchase limited sports and travel insurance coverage through their mobile devices.
King says financial institutions need to focus on two things:
- Partnering with mobile service providers in developing and delivering relevant and secure mobile apps and service
- Working with industry regulatory bodies and the government in developing mobile commerce rules and guidelines that will protect consumer’s money and their privacy
“We have moved from the physical to the digital world, but many operating models are still rooted in the physical world,” says King. “The question now is: How will the financial industry evolve its distribution model in order to catch up with its customers?”
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