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Mobile Banking Takes Off Among Europe's Younger Web Users

Security concerns keep some away

August 5, 2013 | Mobile | Financial Services

More than one-third of web users in Europe already used mobile banking, according to May 2013 data published by ING International. Nearly 12,000 consumers in 12 European countries were sampled by Ipsos for ING’s report, “Financial Empowerment in the Digital Age: Mobile Banking, Social Media and Financial Behavior.” While ING specified a definition of mobile banking in its survey as using mobile devices (such as phones or tablet computers) to help manage their money, some respondents may have misinterpreted the question—perhaps thinking that banking on a laptop via wireless connection was an instance of mobile banking, for example.

Turkey was the regional leader in mobile banking, in terms of the proportion of internet users taking advantage of such services, ING found, with Spain and the Netherlands just behind.

Mobile Banking Users in Select Countries in Europe, by Country, May 2013 (% of internet users in each group)

Banking via mobile device was most common among internet users ages 25 to 34, ING reported. Half of this age group said they used mobile banking, compared to an average of 37% across all respondents. Frequent users of social media were also more likely to use their handset for banking tasks. In fact, 33% of respondents, on average, agreed that they “expect banks to make it possible to do payments through social media.” In the EU-5, Italy and Spain registered the greatest enthusiasm, with 40% and 42%, respectively, agreeing with the statement.

Many people who banked via mobile reported that they now felt more “in control” of their money, because they were able to check their account status more often, ensure bills were paid on time and avoid being overdrawn.

Contactless payment options enabled by near-field communications (NFC) technology are also finding favor among early-adopter demographic segments in the countries polled. But security remains a major issue for most internet users. These concerns were particularly strong in two of the region’s biggest markets—France and Germany—as well as in Austria and Luxembourg. Around half of web users in Germany who didn’t bank via mobile said they had security worries about that activity too.

As smartphone penetration rises sharply across Europe, banks and retailers will increasingly woo consumers with new mobile options for managing their money and paying for purchases. eMarketer estimates that 47.4% of mobile phone users in Western Europe will have smartphones in 2013—with penetration leaping by almost 10 percentage points in 2014.

Smartphone User Penetration Worldwide, by Region and Country, 2011-2017 (% of mobile phone users)

These numbers are bound to encourage significant usage of mobile banking and transactions. In France, for example, the proportion of bank account holders ages 15 and older who used mobile banking rose from 35% in 2011 to 41% in 2012, according to a report by ING Direct.

Gartner, the technology advisory firm, recently forecast that the value of mobile payment transactions in Western Europe alone would reach $29 billion this year, a gain of more than 50% compared with 2012.

Mobile Payment Transaction Volume in Western Europe, 2012 & 2013 (billions)

Yet it seems clear that individual countries will adopt these habits at different rates, depending on the availability of mobile financial services in local markets, and the perceived advantages and drawbacks of using them.

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