Vendors have critical role to play in shaping the future of m-banking

Mobile banking is growing at a feverish pace to emerge as a powerful ‘right here, right now' channel for banks to connect with their retail and business customers, as well as reach new customer segments.

M-banking is already a strategic business and technology priority for the top US banks. While these major players have the financial and technical resources to make a strategic commitment to the mobile channel, most mid-tier and small banks are innovation and/or cost-challenged on this front.

New research from TowerGroup finds that core banking technology vendors have a big role to play in helping mid-tier and small institutions take advantage of this emerging channel that will soon be a cost of doing business.

Core banking vendors sit at the centre of a significant portion of the bank technology market in US. When new technology becomes available, mid-tier and small financial institutions look to their core processing vendors for leadership and innovation. In light of the surging interest in m-banking services, TowerGroup believes that these financial institutions should move ahead with the deployment of m-banking solutions with confidence that their core banking vendors will provide the key to start the engine of m-banking.

"Demographic shifts and new customer expectations along with technology maturity are converging to create fertile ground for mobile banking," comments Virginia Garcia, TowerGroup research director in the Emerging Technologies practice. "Within a few years the mobile device will be the primary access point for consumer banking, with 40m US consumers using mobile banking by 2012.”

“Core banking vendors will be important contributors to the widespread proliferation of integrated mobile banking services and will fundamentally reshape the vendor ecosystem for mobile banking solutions. As the focus shifts from 'technovation' to return on investments, the core banking vendors are ideally positioned to enable proper business economics in support of mobile banking."