Mobile Banking Market

Market Overview

The global mobile banking market size was valued at USD 772.96 million in 2022. It is estimated to reach USD 2,092.36 million by 2031, growing at a CAGR of 11.70% during the forecast period (2023–2031). The increase in consumer demand and the rise in mobile usage promote market growth.

Mobile banking is a service offered by banks and other financial organizations that enables customers to carry out financial transactions remotely by utilizing a mobile device. This service is known as mobile banking. In mobile banking, the devices that are utilized include smartphones and tablets. The primary functions of mobile banking include moving money from one account to another and depositing a check by taking a picture of it. These functions are among the most frequently given services for mobile banking on the market. In addition, it is often compatible with programs designed for the iPhone, Android, or other device platforms.

In addition, mobile banking requires that the mobile device be equipped with an internet or data connection to function properly. Products and services provided by mobile banking include access to account balances and lists of the most recent transactions, remote check deposits, the transfer of funds between beneficiary accounts, electronic bill payments, peer-to-peer (P2P) payments, and several other payment methods. Access to these features is contingent on the application features that are made available.

Market Dynamics

Global Mobile Banking Market Drivers

Increase in Consumer Demand

An increase in customer demand for self-service, fast support, and customization of banking goods and services is the primary force behind the growth of the mobile banking market. In addition, banks and other financial institutions are increasing their investments in developing mobile banking applications to adapt to the shifting preferences of their clients and maintain their place in the increasingly competitive market.

Additionally, close to half of mobile phone users with bank accounts utilize alternative providers and main financial providers to complement their money management. The primary reason is that alternative providers offer lower fees than major financial providers. This pattern is most noticeable in people of younger generations. As a direct consequence of this fact, financial institutions and banks are starting to put fintech innovation into practice through the utilization of partnership and acquisition.

Rise in Mobile Usage

The market is growing due to the steady increase and adoption of mobile and internet usage. Banks and other financial service providers are implementing technology, especially where there has been a noticeable increase in the use of smartphones and tablets. Additionally, 82% of adults in high-income nations own a cell phone and have internet access, suggesting a higher possibility of access to mobile phones or online payments using apps, which is boosting the expansion of the mobile banking sector.

Furthermore, as more customers download mobile banking apps to their smartphones, banks are better able to offer a wider range of financial services, including bill and credit card payments, fund transfers, account and loan statements, complaint filing, requests for checkbooks, and management of insurance policies or portfolios, among other internet-based services. In a recent survey conducted by Business Insider, 89% of participants reported using mobile banking apps, and 97% of millennials claimed they do as well. Older generations have also shown usage patterns, with 79% of baby boomers and 91% of Gen Xers reporting using mobile banking services. Banks and financial institutions are investing in creating end-to-end customer experiences within the mobile channel in light of the utilization rates.

Global Mobile Banking Market Restraint

Rise in Security and Privacy Concerns

The user's handset and the bank zone are the two areas where security concerns in mobile banking can arise. Customers lost trust in the financial organizations offering mobile banking services due to security vulnerabilities, such as password theft and finger ID fraud, which hindered the market's expansion. The expansion of the mobile banking market is significantly constrained by location sharing on mobile apps due to accidental data leakage. Additionally, the data saved on the device and readily accessible by other apps or users compromise user privacy and enable unlawful data use.

Additionally, because of the ecosystem differences among mobile platforms like iOS, Android, and others, financial applications are not fully functional on every device. This is anticipated to result in losing private data and current clients. Financial services and banks are also among the main targets for hacker assaults, and data breaches in those sectors are heavily investigated. Due to attacks like phishing, keylogging software, and similar attacks on financial data, the number of data leakage instances has nearly tripled over the previous two years, slowing the market's expansion.

Global Mobile Banking Market Opportunities

Integration of Advanced Technologies

Using cutting-edge technology like big data, chatbots, blockchain, and similar solutions allows banks to offer a complete consumer experience within the channel. Additionally, mobile banking users can set customized notifications using those technologies, which helps them remain on top of their finances by alerting them to certain payments or when their balances are about to run out. Additionally, banks can use big data engines to streamline client experiences and lessen the impact of fraud in risk assessment processes.

Furthermore, only 24% of banking executives named increasing customer experience as the area where technology has the largest impact, compared to 39% who said cutting expenses. With cutting-edge technologies, banks may extract and compile a sizable pool of consumer data from various sources, including financial statements, mobile banking history, or social media. Additionally, banks can look into each customer's past behavior, spot patterns, and create a comprehensive picture of each account holder to offer tailored financial goods and services via mobile application.

Regional Analysis

Based on region, the global mobile banking market is bifurcated into North America, Europe, Asia-Pacific, and LAMEA.

North America Dominates the Global Market

North America is the most significant global mobile banking market shareholder and is estimated to exhibit a CAGR of 10.5% over the forecast period. With more than three-fourths of the market share, the United States dominated the North American mobile banking industry, and this trend is anticipated to last during the projection period. However, during the forecast period, the North American mobile banking market is expected to grow quickly in Mexico. New initiatives and increased adoption of mobile banking usage are significant drivers of the mobile banking market growth in North America. For instance, the Spanish banking giant BBVA created its first mobile platform in Mexico to coordinate efforts among employees from Spain, the United States, and Mexico.

Additionally, the Mexican government aids regional banks in growing and assisting the vast majority of unbanked people in the nation. Additionally, most of Bank of America's banking products and services are used via mobile applications, with roughly 54% of its clients classifying themselves as digitally focused. As a result, these digital experiences have become a key role in the overall brand strategy of the biggest national banks in the U.S.

Europe is anticipated to exhibit a CAGR of 11.3% over the forecast period. As the business is still in its infancy, it is anticipated that the European mobile Banking market will continue to expand. Increased consumer demand for early-stage FinTech businesses, new financial services, and consumer-facing products would fuel European industry expansion. Due to the abundance of small and medium-sized businesses (SMEs) in Europe, it is projected that the mobile banking markets in Germany, France, and the UK will experience rapid growth.

Moreover, to accommodate consumer demand, banks and other financial institutions are investing heavily and improving mobile banking services. For instance, Orange Bank, a French online bank, offers mobile banking as part of its digital strategy. It includes features like virtual advisors, real-time balances, and other value-added services. Wirecard, a digital payments platform, is the foundation for its mobile banking and payment services.

In Asia-Pacific, Due to increased mobile usage in emerging economies and technological advancements made by local Fintech companies, banks are concentrating more and more on improving the products and services they offer for mobile banking. Banks are also undergoing a digital transformation to strengthen their interactions with clients and partners within the corporate and commercial banking ecosystems.

Furthermore, major financial institutions and banks in developed Asia-Pacific nations like Singapore, Hong Kong, and Australia are prioritizing and forming alliances with financial technology firms while investing in mobile banking technology to meet consumer demand. The banks are a significant trend in the industry because they are constantly growing and attempting to expand into new regions and underserved market groups. For more complicated services, many clients still prefer going to a bank office, making it difficult for banks to provide a digital experience through mobile banking services.

The LAMEA mobile banking market is anticipated to grow during the projected period Due to increased demand for eWallet solutions via mobile banking applications in Latin America's smaller, less developed locations. The expansion of the market is driven by the creation and application of cutting-edge technology for the introduction of mobile wallets and banking services. Africa is also highly known for being the newest electronic payment method leader. The industry is anticipated to foster prospects in the region as mobile banking usage increases, notably in South Africa.

Future growth in LAMEA is anticipated to be substantial due to the region's growing use of mobile banking, rapid technology advancement, and demand for support. Additionally, when users open savings accounts, take advantage of loan services, buy insurance, and participate in government assets or stock markets via mobile phone, Africa can access mobile banking and other services.

Segmental Analysis

The global mobile banking market is bifurcated into transactions and platforms.

Based on the transactions, the global mobile banking market is bifurcated into consumer-to-consumer and consumer-to-business. 

The consumer-to-business segment dominates the global market and is projected to exhibit a CAGR of 12.4% over the forecast period. Applications for mobile banking are increasingly important in consumers' digital lives. For day-to-day financial transactions, including paying bills, making online purchases, paying equated monthly installments (EMI), and other similar ones, tech-savvy consumers increasingly Favor mobile banking alternatives. Additionally, on average, 40% of mobile users actively search for bank offers, promotions, or interest rates, creating the promising potential for consumer-to-business online transfers.

Additionally, people seek credit from the market's current banks to take advantage of multiple offers. Mobile banking also provides customers with a low-cost, secure conduit to manage their accounts safely, advancing the market's self-service banking strategy. Neo and Challenger Banks, such as "bunq" in the Netherlands and "Atom" in the United States, only offer mobile banking, making it convenient for consumers to sign in to accounts while on the go and removing the need for paper log-in forms. Additionally, banks are giving access to unbanked people who cannot prove their identity through a permanent address or credit history using authentication technology.

Based on platforms, the global mobile banking market is divided into Android, iOS, and others. 

The Android segment is the most significant contributor to the market and is estimated to exhibit a CAGR of 12.0% over the forecast period. Android is an operating system for mobile devices that serves as a platform for a range of users for personal and professional use. The Google Play Store, which has about 2.8 million apps accessible for various markets like media entertainment, sports, finance, gaming, ride-hailing, and others, is where Android users get their apps from. In addition, the utilization of mobile financial applications has significantly increased when considering usage and penetration statistics.

Additionally, 41% of internet users actively utilize mobile devices to access financial services. The developing world is a crucial market for mobile banking, which, with the aid of developing technologies and advanced features in mobile banking, is poised to bring millions of unbanked people into the formal banking system. In addition, emerging nations are leading the way in this growing field thanks to advancements in financial software that benefit those without official banking accounts. These platforms are being used to access various banking services and products to cut down on waiting time and provide access to private financial data.

Recent Developments

• February 2023- The National Bank of Kuwait launched its new mobile banking application. The application offers a more personalized experience by providing smart design and experience changes, resulting in a host of benefits for customers.
• January 2023- Yes Bank has partnered with Microsoft to develop a next-generation mobile application to provide customers with a personalized banking experience. The app will offer customers services such as shopping, online payments, rewards, customized dashboards, and traditional banking functions.