I read with interest this recent article in the Globe and Mail, which asserts that:

Less than 10 per cent of Canadians are using mobile banking, but experts say it won’t be long before the service is more popular than online banking. Research suggests that consumers in this country would prefer to check their bank balances, transfer money, or pay their bills while sitting on their morning train commute or standing in line at the coffee shop rather than at their office or home computer.

I’m not sure it’s going to be that easy. Mobile banking started in 1999 with 724 Solutions and BMO, as well as Saraide/Fido/Royal Bank of Canada, as a service call Fido Pro. Both services were launched in the market with not much fanfare. Smartphones were non-existent, however all the basic functionality existed.

I think we will see something else emerge in Canada that will augment mobile banking but not actually bemobile banking. I just don’t buy that mobile banking via a smartphone will never surpass online banking. Plus, the reality is that ATM machines are on pretty much every corner in big cities, and at least one in small towns. Between these and online banking, how much need is there for mobile banking? Unless the transaction is very urgent for some reason, usually you can get to a computer or ATM to complete it.

I do think that Canadians can learn a lot about mobile banking from the developing world. Their experiences illustrate that problems create innovative solutions. For example, banking for the bottom of the period (BOP) in the developing market is non-existent. Banking for the BOP in the developed market still exists. Because physical, financial, and technical problems that exist in the developing markets are so diverse, different and creative forms of banking and payments have emerged.

The article sums up that:

Part of the reason mobile banking is so sluggish in Canada is because the country is relatively sluggish with most things mobile. The percentage of Canadians who have cell phones remains well below many other developed nations, at about 70 per cent, despite advanced technologies deployed here. And smart phone use is still only a small part of the Canadian mobile market.

I think, to make mobile banking a reality, Canada needs to approach the market in a way in which we aren’t replicating what already exists via the internet. Smart-phones augment our lives, they don’t completely replace what and how we use the services via the web today. Basic principles need to exist: If a business model can thrive on the web exclusively, then in reality it most likely can’t thrive in the mobile domain.

What we will see emerging here is a more Japanese or Korean type of service with your mobile, not quite the same. Useful and augmenting our lifestyle, not inserting technology for the sake of technology.

What do you think about the future of mobile banking in Canada?