Banks must move fast to embrace mBanking

Summary:Banks will have to built close relationships with mobile network operators if they are going to offer consumers decent mBanking services

Financial companies have been warned that they can't afford to delay getting involved in mobile banking.

Research firm IDC believes that because of the complexity in setting up and running an mBanking system, banks must get up to speed now. There will be at least 270 million mobile phone users in Europe by 2003 -- potentially a massive market -- but the banks will have to work closely with network operators if they are to create successful mBanking services.

"We recommend the banks enter the mobile business as soon as possible because second chances do not come around too often in the technology world," said Chris Barnard, research manager of IDC's European eBusiness and Networking group.

Some UK banks have already started offering mobile services.

The Woolwich Bank was the first to launch a WAP banking service in Britain, in 1999, while the Nationwide Building Society has allowed customers to access details of their accounts through a personal digital assistant (PDA) since last December. In total, Western European banks are thought to have spent £29m on mobile banking in 2000, and are expected to spend more this year.

One major challenge faced by the banks is that the mobile network operators are also keen to have a share of the lucrative mbanking market. Many operators who have spent billions of pounds on third-generation mobile phone licences are now desperate to find ways of recouping their money -- and some experts expect many operators to apply for banking licences in the future.

IDC expects financial service providers to make close alliances with network operators, in an attempt to take advantage of the close relationships between mobile operators and their customers.

For complete business coverage, see ZDNet UK's Enterprise Channel.

Have your say instantly, and see what others have said. Click on the TalkBack button and go to the ZDNet news forums.

Let the editors know what you think in the Mailroom. And read other letters.

Topics: Tech Industry

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Related Stories

The best of ZDNet, delivered

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
Subscription failed.