IMPACT OF SMARTPHONES ON ONLINE BANKING

We are currently in the 21^st Century world otherwise known as the Age of Technology. Various means of technological advancements and innovations have surfaced over the years making life easier and products more accessible.  When we talk about technological advancements, we can look at trends such as the surface of MIFIs, smart devices (smartphones, smart watches, smart TV, etc.), virtual realities like the Samsung VR, flying cars like the AeroMobil, portable laptops, home assistance devices like the Amazon echo, 3D printers, electric transport systems like bicycles, cars, trains, etc. and so many more. Well, all these technological advancements wouldn't have been possible without the sprung of the internet. 

The world of technology is growing as fast as a rocket rising up into the skies. With the modern system of life, delay in equipping yourself with these techs can render you obsolete in the society. Bankers, lawyers, doctors, teachers, and people with other professional careers even go to the extent of seeking extra educations or class trainings just to make sure that they are still in a good lead in their professional life. Various companies have gone out of business whilst some have lost majority of their market shares to new players due to their inability to stay innovative. The most mentioned companies are Nokia, Blackberry, Blockbuster, Kodak, Hummer, Yahoo, etc. Now it is a norm that corporate entities and entrepreneurial firms strategize in a way that best help their firm maintain ongoing presence without being affected by these tech scandals.

Without further ado, let’s proceed to what we are actually here for.

The smartphone manufacturing industry is one of the fastest growing industry in the world. We can’t talk about smartphones without mentioning popular brands like Samsung Galaxy and the Apple iPhone. The two brands have maintained a very strong brand name and this have reflected in their sales over the years. Samsung is best known as the most innovative company whilst Apple is known as the best flagship smartphone manufacturers.

Online banking, also known as internet banking, or virtual banking, is an electronic system that enables customers of a bank or other financial institution to conduct a range of financial transactions through the financial institution's website. Online banking should be contrasted with e-banking since e-banking deals with the transaction of banking activities through electronic devices such as ATMs, POS, mobile phones, etc. 

"All online banking activities can be referred to as e-banking, but not all e-banking activities that can be categorized as online banking." ~Cypran Akubude

The banking world have seen a lot of improvements and innovations based on how services offered can be accessed by the general public. In the previous years, bank growth was determined based on the number of branches the bank has, but currently, bank growth is normally determined based on the accessibility of the banks online platform. However, we can’t talk about the performance of the online banking world without investigating the devices that have contributed towards it.

According to Statista.com, the following are the devices used to access the internet:      

• Desktop PC
• Laptop
• Mobile phones/smartphones
• Tablet
• Smart TV
• Portable media player

But the question is, among which of the devices is widely used by bank customers to conduct financial transactions online? TheGuardian.com stated in their article that smartphones is the most popular way to browse the internet. According to the Internet Trends Report 2016 by KPCD.com the chart below represents the time spent per person on digital media. Their research is conducted based on three device categories that is Desktop/Laptop, Mobile/smartphones, and other devices. The desktop/laptop and mobile/smartphones are considered to be the most widely used internet accessible devices.

Taking the results for 2015 into consideration, you can observe that 51% of the total used mobile/smartphone devices, 42% used desktop/laptop, and 7% of the total used other internet accessible devices. We can confidently expect a much higher percentage in 2016 and 2017 but not enough information can be obtained online.

Another evidence can be drawn from an article by BGR.com dubbed “mobile internet usage surpasses desktop usage for the first time in history”. Basically, the article seeks to evaluate the rate of internet usage worldwide. Their research categorized mobile phones and tablets as both smartphones due to their similar features. The study period is from October 2009 to October 2016. Below is a pictorial representation of their findings.

 

The BGR.com research shows that the mobile & tablet usage outweighs that of the desktop which is similar to the results of the previous study.

Statista.com did more of an in-depth study by incorporating all internet accessible devices with their percentage rate of internet usage by users. The limitation of their study is that the study is based on the United Kingdom. However, we can still meaningfully generalized the findings on bank performance. Below is their results.

So far, all the research from the three sources have seem to have similar findings. The results therefore proves the importance of smartphones as far as online banking is concerned.

I will however hypothesize that the higher the smartphone users, the higher the higher the flexibility for people to have access to online banking products/services, which also directly influences on the profit of these banking institutions.

Thanks for reading and have a wonderful day.

Cypran Akubude

Student, Central University.