Step change in smartphone use an opportunity for banks

Last year was a “step change” in Australians’ use of smartphones and presents a huge opportunity for banks to offer customers increased conveniences and services, according to EY Sweeney.

“Every few years, we see a step change in the way people are using digital devices and engaging with organisations,” according to Digital Australia: State of the Nation 2015-16, by EY Sweeney. “2015 was one of those points, with smartphone usage pushing through the 80% mark for the first time and 33% of Australians spending more than two hours a day on their phones.”

In fact, the study finds that digital engagement trumps sleep! Australians spend an average of 7 hours and 20 minutes sleeping per night, yet spend an average of 10 hours a day engaging with their digital devices.

Anita Kimber, a Sydney-based advisory partner in EY’s Financial Services Organisation, notes that despite the rapid take up of smartphones, more Australians use internet banking for transactions and payments rather than using apps. About two-thirds of Australians use internet banking at least once a week.

“We have an opportunity to be in people’s pockets the whole time, supporting their lifestyles and offering them increasing convenience and we’re seeing an increased use of apps to drive digital banking,” she says. “That’s the opportunity – to increase the functionality, the richness of that mobile channel even more so.”

Banks are putting a particular focus on ease of use, says Kimber. They are investing more in analytics, not just to improve user interfaces but also using the data to support what is offered to individual consumers and more relevant, personalised content. “It comes back to that opportunity to offer convenience within your pocket,” she says.

Size of payments market increasing

They are also drawing on the data to support which offers pop up for individual customers and to personalise services to make them more relevant. “How can we give consumers a wider choice? How do we use that wealth of information that’s available through social media and big data to make that experience as relevant to them as possible?” says Kimber.

“That has to be where the opportunity is for financial services, the banks and insurance companies.” The finance sector leads the way in digital engagement, with 91% of Australians interacting online with their financial institution at least once a year and 36% doing so more than once a week.

The report states that the finance sector “gets it right” because they understand the specific needs of their customers and how to apply digital solutions, and they invest in and embrace potentially disruptive forces. In fact, Kimber says that she has noticed an increased willingness on the part of banks around the world to partner with outside organisations. She doesn’t view the entrance into the payments space of non-bank players – such as fintechs and tech companies like Apple and Google – as a threat to the banks.

“On one hand, you could say, ‘yes, that’s a stress to the bank’,” she says. “On the other hand, what we’re seeing here is a general increase in the market available. We’re looking at the creation of an expanded market with more and more people using digital channels to make payments, more and more transactions happening, and banks at the end of the day still retain the majority of our payments processing.”

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