According to respected market research organisation World Wide Worx, the number of people banking from their cellphones has exceeded that of people banking from their PCs in South Africa. More than a quarter of bank customers are turning to their cellphones for services ranging from informational transaction types such as balance enquiries to financial transaction types which include account payments.
This was one of the key findings from the consumer phase of the research company’s Mobility 2009 research project. The study was backed by First National Bank (FNB), leaders in cellphone banking in Africa, and Research In Motion (RIM), the company behind the BlackBerry solution.
“It is encouraging to see that not only in FNB, but across the country, cellphone banking is now part of people’s lives,” says Len Pienaar, CEO, FNB mCommerce.
The study revealed that, while 16% of banking customers in South Africa use the internet for banking, 28% use their cellphones. A total of 34% of banking customers use one or both of these channels. Outside of the branch and ATMs, only 6% relying exclusively on the internet, while 18% rely only on cellphone banking.
“The fact that services like cellphone banking are taking off so strongly shows that consumers no longer see their cellphones only as voice and text messaging devices, but use them stay in touch with everything that matters in their business and personal lives,” says Deon Liebenberg, Regional Director for Sub Sahara Africa at RIM. “With a device like a BlackBerry smartphone, you have immediate access to financial information, your accounts and banking services while you are on the go, wherever you are.”
The study revealed that the main services driving cellphone banking were balance enquiries and notifications of transactions, with three quarters of cellphone bankers using these features. Just under half view statements on their cellphones, 35% transfer between accounts, and 28% pay accounts on their cellphones. In contrast, only 8% add beneficiaries via the cellphone, indicating both security concerns and set-up issues.
“Our research shows that South Africans are becoming comfortable with cellphone banking, but precisely half of general banking customers are still nervous of it, citing trust as their major concern,” says Arthur Goldstuck, MD of World Wide Worx. “However, this concern must be seen in the light of 34% also saying the issue is not knowing how to use the service.”
“Although we have made great inroads, two-thirds of banked people still don’t use electronic channels, other than an ATM,” says Pienaar.
At the same time, two thirds of cellphone banking users were satisfied with the security of the channel. This suggests that, once customers start using cellphone banking, they grow increasingly confident in both security and usability aspects.
“We have seen this rapid adoption driven by our USSD menu service, although I believe that WAP will start to play a more important role in future,” says Pienaar.
Liebenberg adds: “The success of cellphone banking shows that there is a strong demand in South Africa for powerful and easy to use mobile data services and applications that help people to save time and stay in control of their lives at all times. With mobile penetration at more than 114% in South Africa, we can expect to see the adoption of mobile banking and other personal services and applications ramp up quickly.”
The study also shows purchasing via the cellphone beginning to take off, with 24% of cellphone banking customers purchasing prepaid electricity and 21% making general purchases like movie tickets and flowers. Purchase of airtime still leads the way here, accounting for 61% of cellphone banking users.