How Mobile Tech is Revolutionising Banking & Finance
Mobile technology has affected every area of our lives, but perhaps the most dramatic changes have been in how we handle money. Mobile tech has revolutionised finance at every level, from executives in a boardroom to people tapping in on the tube with their phone. Let’s have a look at some of the most exciting new developments in mobile finance across the world.
All the major high street banks now offer apps with different degrees of functionality, from simply checking your balance to transferring money and setting up standing orders.
Experts have estimated that this has allowed customers in the UK to save up to £7 billion every year, by alerting customers when they’ve overspent and letting them move money around quickly to avoid overdraft fees.
The majority of digital first banking customers are from younger demographics, with millennials more trusting of smartphone security, and quicker to embrace them as a tool to manage all areas of their life.
It’s not just the high street banks taking advantage of this: the last few years have seen a new trend for new ‘digital first’ banks, with customers managing their apps primarily through apps. N26 is a new bank based in Germany with 300,000 customers across 17 EU countries. As well operating mostly through mobile, it offers a marketplace for other financial firms to offer services like international money transfer.
By bringing financial services directly to customers’ mobile phones, these new banks are stirring up the industry, able to be more flexible, and more available and perhaps most importantly cheaper than bricks and mortar institutions who have the additional costs of premises and staffing.
Instant Payments and Electronic Wallets
Connected to mobile banking, phones and tablets are also hosts to instant, free payment apps, allowing people to transfer small amounts to each other without charge or inconvenience.
Paypal is the one most people might be familiar with: it’s been around since 1998, but only launched an app in the mid 2010s. It takes longer than most to complete transactions, so you have a delay before your money hits your bank account, but it’s widely known and recognised.
Barclays launched Pingit in 2012, which has since gone independent of Barclay’s brand. It’s innovation was to tie the payment to users’ phone numbers rather than bank accounts: you don’t need a lot of details from someone to send money: you can pay your share of a bill as easily as texting.
Facebook and Snapchat have picked up this baton, in the US at least, by building money transfer functions into their instant messaging services. As long as you and the person you are talking to have linked your bank accounts to your messaging app, you can send money seamlessly as you chat.
The biggest success story of mobile revolution likely comes from the two mobile giants Apple and Android. Both of them have released payment apps that allow you send money quickly and easily between users and can also stand in as a bank card when making contactless payments.
Security and Blockchains
All of this innovation needs to be backed by security to match. If the mobile banking advances that can turn your phone into a contactless credit card, or let it send money across the world with just a phone number as a reference aren’t matched by equally revolutionary security measures, they open up innumerable loopholes for fraudsters and hackers to take customer’s money. This would not just drive customers away from this new form of banking, but cost the banks in reparations and fines, undermining the cheap, flexible service digital banking provides.
One of the new security measures underpinning the digital banking revolution is Blockchain Technology. Born out of the Bitcoin movement, Blockchains are secure, shared ledgers of financial transactions which are in the early stages of being applied to Electronic Wallets and Transfer apps to both protect and speed up processing transactions.
Blockchains are publicly shared, meaning they are always immediately verifiable and have no single source a hacker can access and corrupt. They are also continually reconciled, so transactions go through almost instantly.
With giants like Barclays working on integrating Blockchain tech into their infrastructure, they’ll surely be revolutionising mobile banking within a year or two.
While these apps make managing your finances easier every day, they also make your phone more vital than ever. To make sure you can use your always use your phone when you need to, you can get your mobile phone top up sent to you anywhere in the world.