Mobile commerce reaches the tipping pointPresentation Transcript
Connected worldOpinion LeaderTrust me, it’s convenientSustaining brand relevance with the connected consumerMobile commerce reaches the tipping point Share this In Focus
Trust me, it’s convenientMobile commerce reaches the tipping pointAround half of the world’s mobile owners areready to use their phone to make purchasesand manage money – but mobile finance playersmust tailor their strategies to the conditions ofeach market to take full advantage. Share this In Focus
Trust me, it’s convenientMobile commerce reaches the tipping pointUse of mobile banking and mobile wallet services is Mobile banking: identifying the opportunities opportunity for mobile banking is best understood byset to surge worldwide as consumers respond to the Phone owners’ enthusiasm for mobile banking setting such broad distinctions aside. A more insightfulpromise of convenience, and look past security concerns. varies considerably by country, even within bands of analysis groups markets according to their adoption ofThe Mobile Life 2012 study reveals that 50 percent development. Significant differences in consumer and interest in the service – and the existing availabilityof the world’s phone owners are either interested in attitudes emerge between different developed markets of traditional banking channels.mobile banking services or using them already, whilst 45 and different emerging countries, and the level ofpercent show the same level of enthusiasm for makingpayments using their phone. Acceptance of mobile bankingWhether in Asia, The Americas, Europe or Sub-SaharanAfrica, consumers identify convenience as the key driverof their enthusiasm for mobile commerce. However,different markets provide very different contexts for theidea of doing things more easily: the sophistication ofmobile technology, the perceived dangers of fraud androbbery and the familiarity of banks themselves all havea role to play. Mobile finance providers must be wellaware of these nuances as they figure out which servicesthey should offer – and which brands they should offerthem through. Target the right markets with the rightapproach and they are likely to find in mobile commerce Interested Usinga major opportunity for increasing market share. Share this In Focus
Country view - Mobile banking acceptance vs. traditional banking access Higher access to traditional banking Higher traditional access lower acceptance Higher traditional access higher acceptance UK Germany Japan Korea Lower interest in Higher interest in mobile banking mobile banking Kenya Turkey Romania Tanzania Lower traditional access lower acceptance Lower traditional access higher acceptance Lower access to traditional banking Share this In Focus
Trust me, it’s convenientMobile commerce reaches the tipping pointWithin developed markets, with generally strong The developed markets with the greatest appetite fortraditional banking services, the balance of smartphones mobile banking are those which are very comfortable Country view - Mobile banking acceptanceand non-smartphones in the hands of consumers with mobile technology. 44 percent of mobile owners vs. traditional banking accesstends to define how enthusiastic they are about mobile in these markets already use a smartphone, makingbanking – and the immediacy of the opportunity for them the most popular form of handset versus either Higher traditional access higher acceptancefinancial, and other partner brands, such as those in advanced or basic feature phones. Australia Ireland Norwayretail, technology and even consumer packaged goods. Brazil Israel Singapore Canada Italy Spain Chile Korea Sweden Smartphone ownership (%) Colombia Malaysia Taiwan* Hong New UK 46 46 Kong Zealand USA 42 39 30 31 32 The 19 markets falling into this group of higher access to tradition banking and higher interest in mobile 20 21 baking, which include Australia, Brazil, Korea, the UK and USA, are also the most familiar with online banking, already used by 58 percent of their mobile owners. 10 For banking customers, the move from online PC to mobile banking is a small step that offers immediate Global N America Europe Dev Asia India China Emerg Asia Lat Am MENA SSA and easily understood benefits in terms of convenience and ‘always-on’ availability. Share this In Focus
Trust me, it’s convenientMobile commerce reaches the tipping pointWith mobile banking services quickly flooding the Interestingly, consumers in these markets do not intendmarket in these territories, the opportunity is immediate,even urgent. Already, 15 percent of mobile owners use to reduce their use of any other banking channels significantly, once they take up mobile banking. Their Mobile banking hasmobile banking services with an additional 35 percentintending to do so. Consumers are already very attuned intention is to fit mobile into their banking repertoires, using the most appropriate of their portfolio of services the benefits ofto the benefits that mobile banking offers and banksface a potential competitive disadvantage if they fail to for different banking tasks. Intended use of branch banking, for example, drops only from 54 percent to on-the-go access anddevelop such services. 46 percent. Mobile banking will likely steal some of the usage occasions previously reserved for in-branch immediacy, however or online exchanges – mobile banking has the benefits for more advanced 15% of on-the-go access and immediacy, however for more advanced transactions, people will likely still rely on online or in-branch. Although privacy and security transactions, people of mobile owners use mobile banking with register as potential barriers amongst some phone will likely still rely on owners, there is potential for rapid growth in mobile an additional 35 percent intending to do so. banking if these concerns are adequately addressed online or in-branch. in product development and communication. Share this In Focus
Trust me, it’s convenientMobile commerce reaches the tipping point countries that show far less interest, despite high levels Mobile banking channel usage - current & intended Country view- Mobile banking acceptance of access to traditional in-branch banking services. Global vs. traditional banking access Consumers in these markets are far more likely to own Higher traditional access lower acceptance 52 basic feature phones than more advanced smartphones, and they are significantly less likely to have tried online 45 Argentina* Germany Russia* Belgium Greece Slovakia banking (only 38 percent of phone owners have banked 41 Czech Hungary Switzerland this way, compared to 58 percent in the first group of 38 Republic Japan Thailand developed countries). Denmark Netherlands UAE Finland Poland Ukraine* The opportunity for mobile banking in these markets France Portugal is longer term but still potentially significant. Although 22 19 current usage of mobile banking stands at only seven 16 percent on average, a further 22 percent of phoneAmongst another group of developed countries – owners intend to try it. As smartphone penetration 7those with higher access to traditional banking but improves, mobile banking will increasingly resonate withlower acceptance of mobile banking - limited mobile consumers. However, those offering the services musttechnology and a lack of familiarity with online banking work harder to establish the convenience benefits, and Branch Telephone Online Mobileare holding back enthusiasm for mobile banking the value of alternatives to in-branch banking, especially Current usage Intended usageservices. Germany, France, The Netherlands, Argentina, given the lower previous take-up of online services.Russia and Japan are amongst a group of 19 developed Share this In Focus
Trust me, it’s convenientMobile commerce reaches the tipping point Those markets that are highly engaged are made up the most important feature of mobile banking for 15 Country view - Mobile banking acceptance predominantly (although not entirely) of rapid growth percent of phone owners. In taking advantage of strong vs. traditional banking access markets and includes South Africa, Kenya, Uganda demand, mobile banking providers must adapt their and Nigeria as well as China, Vietnam and Mexico. offer both to the mobile technology available in each Cameroon Ghana Kenya Across these markets, 41 percent of mobile owners market – and the need to educate consumers. Close to Nigeria South Uganda* have no prior access to banking services – and in their a third (29 percent) of mobile owners in these markets China Africa Mexico enthusiasm for mobile banking, consumers appear indicate that they do not know how to use mobile Saudi Indonesia Vietnam to recognise an opportunity to fill this gap. To meet banking services. Arabia Tanzania Cameroon this demand, mobile banking providers must be ready Lower traditional access higher acceptance to build from the ground up, addressing a lack of Interest in uses of mobile banking - Global familiarity with banking in general and often providing‘Convenience’ has a very different connotation in basic financial services for the first time.emerging markets, where many mobile owners have noprior access to banking services of any kind – and the Mobile banking offers should focus on the simple things Paying utility billsbenefits offered by mobile banking can mean foregoing in financial life: receiving wages and making paymentsa day’s journey on foot to reach a bank branch rather and transfers. Sending money to relatives abroad is athan avoiding a 10-minute wait in a queue. The value priority for many migrant workers in these countries, Receiving your wages / salaryof mobile banking services to emerging markets has whilst Mobile Life shows strong demand for payingbeen well established. However, Mobile Life reveals a utility bills via mobile (the “most important point” forstrong and occasionally surprising divergence between over 23 percent of phone owners) and receiving salariesone group of countries that are highly engaged with the (“most important” for 16 percent). The ability simply Reading your account detailsconcept, and another group that have very little interest to access account details is itself highly valued – andin it. Share this In Focus
Trust me, it’s convenientMobile commerce reaches the tipping point Country view - Mobile banking acceptance vs. traditional banking access As phone capabilities increase, Cote Egypt Senegal interest in advanced features such as mobile banking will grow. D’Ivoire Romania Pakistan Philippines India Turkey Lower traditional access lower acceptance This group features some surprising inclusions: India, Developments in mobile infrastructure are a BRIC market and one of the most dynamic economies a precondition for mobile banking to take off inConsumers in the final group of markets identified by worldwide, and Turkey, with its rapidly growing these countries. As phone capabilities increase,Mobile Life also lack familiarity with both banking and economy and movement towards EU membership. interest in advanced features such as mobile bankingmobile technology. However, there is a big difference: Significant divisions between rural and urban will grow. Until then, however, these markets should50 percent of phone owners across these markets have development and lack of mobile infrastructure appear to remain the lowest priority for those developingno interest in engaging with banking services in general, be contributory factors: 78 percent of mobiles are basic mobile banking services.let alone with mobile banking. The value of even simple feature phones and 43 percent of phone owners do notfinancial services is poorly established. know what mobile banking is. Share this In Focus
Trust me, it’s convenientMobile commerce reaches the tipping pointMobile wallet: the adaptive technologyLike mobile banking, the adoption of mobile wallet In emerging markets such as Uganda 13%technology is growing rapidly on a global basis. Mobile and Tanzania, where mobile walletwallet is a broad term that signifies the use of phones tomake purchases utilising NFC (near field communication) adoption outstrips acceptance of mobiletechnology whereby consumers touch their phone to banking for now, lower technological Smartphone usera sensor in order to pay. Unlike with mobile banking barriers and the simple, SMS-basedhowever, adoption is spread evenly across different typesof markets, with the mobile wallet concept adapting to nature of many mobile payment 9% services could be playing a key role.the level of technology available in different countries.There is some correlation between enthusiasm formobile banking and adoption of mobile wallet. Uganda, The strong early adoption of AsianHong Kong and Korea, the three leading countries for Advanced feature phone usermobile wallet usage, all show high levels of enthusiasm markets such as Japan and South Koreafor mobile banking; meanwhile India, Pakistan, The reflects retailers’ investment in mobile 78%Philippines and Egypt fall in the bottom ten for both. payment infrastructure – and shows the important role that merchants play Basic feature phone user in creating a mobile wallet ecosystem. Share this In Focus
Egypt Vietnam Thailand Philippines D1. Usage of mobile Greece Senegal Pakistan India Base: Mobile users wallet - 44220 Cam eroon 1 1 1 1 1 2 2 2Share this CoteD’Ivoire South Africa Hungary Ghana 3 3 3 3 Nigeria Mobile wallet usage Portugal Indonesia Rom ania Poland 4 4 4 4 5 Czech Republic 6 Saudi Arabia New Zealand Sweden Argentina Denm ark 7 7 7 7 7 China UAE 8 8 Ukraine Norway 9 9 Russia Finland Turkey 10 10 10 Slovakia Colombia Netherlands Chile Germ any 11 11 11 11 11 Israel France 12 12 Belgium Mexico 13 13 Australia Ireland USA 14 14 14 Brazil Taiwan Switzerland 15 15 15 Malaysia Canada 16 16 UK 18 Kenya Italy 22 22 Spain 23 Tanzania 25 Singapore Japan 26 26 Korea 31 Hong Kong 36 UgandaIn Focus
Trust me, it’s convenientMobile commerce reaches the tipping pointMobile wallet providers must vary their approach to Mobile Life spotlights the efforts of different mobile 30%the level of technology available in each market – players battling to take control of the mobile commerceand also to reflect different triggers for adopting the ecosystem, with interesting variations in the questionservices. Convenience and speed are the key drivers for of whom consumers trust to handle their payments.developed and tier 1 emerging markets, but avoidingthe need to carry cash far outstrips these considerations Typically these bases of trust relate to the systems of consumers in Asian countries prefer credit cardsfor tier 2 emerging countries. As with mobile banking, already dominant within the market. Mobile networksthe stakes are raised when it comes to the consumer score significantly higher on customer preference in 53%needs that mobile commerce addresses: lack of security Sub-Saharan Africa, where existing money transferand fear of being robbed, trump lack of time and fear services from the likes of Kenya’s Safaricom have alreadyof being inconvenienced. established credibility. Credit card companies score particularly highly in developing Asian countries, where of mobile owners worldwide preferred choiceThe uptake of mobile wallet does not simply rely on they are preferred by 30 percent of consumers, as well for brands to handle money, are banks.consumers however, and a large part of adoption is as in the heavily credit-based USA. In all territories,reliant on retailers. Developed Asian markets are very however, banks emerge as the most trusted brands tomuch early adopters of mobile wallet capabilities, handle money, the preferred choice for 53 percent ofhowever in many cases, particularly Japan and South mobile owners worldwide. Partnership with a bankingKorea, this adoption is quickly explained by the ease brand is likely to strengthen the appeal of a mobileof payment in-store and infrastructural efforts retailers wallet service in the vast majority of markets.have made. Share this In Focus
Trust me, it’s convenientMobile commerce reaches the tipping pointMoving forward together: mobile banking over digital security. And partnership with banks is likely In each market, mobile commerce providers must tailorand mobile wallet in step to be a major competitive advantage in the mobile their offers to the level of technology available, theDemand for mobile banking and mobile wallet services wallet space, lending a familiar brand presence to help enthusiasm for and understanding of mobile banking,feed and influence one another – and this produces with education and awareness. Partnership between the providers that consumers best trust to deliverimportant variations in the nature of the mobile mobile banking and mobile wallet providers will also payment services, and the nature of the freedom thatcommerce ecosystem in each market. It seems likely that provide a distinct role for mobile in consumers’ existing mobile commerce provides. Freedom from fear andthe simple mobile wallet services already established repertoire of banking services. financial exclusion potentially demands very differentin countries such as Uganda and Tanzania are helping consumer messaging to freedom from queuing andto fuel interest in mobile banking, despite the lack of The opportunity: mobile commerce call centres.familiarity with banks overall. The accessible nature of as differentiatormobile wallet services in these markets should influence The rapid growth in demand for both mobilethe form of mobile banking services and may well mean banking and mobile wallet services makes them athat mobile networks, already established in the mobile vital differentiator in competitive markets. For banks,wallet space, are trusted to help provide them. provision of mobile services is a spearhead for gaining share quickly in rapid growth countries, and encouragingIn developed markets where mobile banking acceptance switching between providers in more mature bankingis already high, the expectations for mobile wallet markets. Meanwhile, the availability of mobile walletservices will also be higher. More complex solutions, services will soon begin to influence consumers’ choicesuch as near-field communications or touching phones of which retailer to visit, particularly in countries whereto sensors, are likely to be demanded that are tailored to mobile payments, and avoiding the need to carry cash,smartphones and designed to allay consumer concerns are recognised as enhancing personal safety. Share this In Focus
About In FocusIn Focus is part of a regular series of articles that takes an in-depth look at a particular subject, region ordemographic in more detail. All articles are written by TNS consultants and based on their expertise gatheredthrough working on client assignments in over 80 markets globally, with additional insights gained through TNSproprietary studies such as Digital Life and Mobile Life. About the Authors Fiona Buchanan is based in Melbourne and is theAbout TNS Global Connect Development Manager at TNS.TNS advises clients on specific growth strategies around new market entry, innovation, brand switching and Fiona has been with TNS for over six years and instakeholder management, based on long-established expertise and market-leading solutions. With a presence collaboration with Ryan Versfeld runs the global syndicated project, Mobile Life. Fiona provides mobilein over 80 countries, TNS has more conversations with the world’s consumers than anyone else and understands and digital thought leadership, insights and supportindividual human behaviours and attitudes across every cultural, economic and political region of the world. to a range of TNS’s global clients and local teams.TNS is part of Kantar, one of the world’s largest insight, information and consultancy groups. Ryan Versfeld is based in Cape Town and is the AME Connect Development Manager at TNS. InPlease visit www.tnsglobal.com for more information. the four years that Ryan has been with TNS he has delivered insights to a range of international clientsGet in touch and holds particular expertise in working with TNS’sIf you would like to talk to us about anything you have read in this report, please get in touch via ConversionModel to define growth opportunities for his clients. Ryan, collaborates with Fiona to deliverenquiries@tnsglobal.com or via Twitter @tns_global Mobile Life and advises a range of clients across the world on mobile and digital, with a particular focus on the AME region. Share this In Focus
About Mobile LifeMobile Life is an annual investigation into the behaviours, motivations and priorities of the world’s mobile phoneusers. Now in its seventh year, Mobile Life is the most comprehensive view of how the world’s consumers are usingtheir phones today and the opportunities this presents for brands. A set of interactive data visualisations exploringthe current – and potential future – use of a range of apps and services is available at www.tnsglobal.com/mobilelifeBased on 48,000 conversations in 58 countries, Mobile Life is designed to capture the entire population of mobileusers in each market and includes: Argentina, Australia, Belgium, Brazil, Cameroon, Canada, Chile, China,Colombia, Cote D’Ivoire, Czech Republic, Denmark, Egypt, Finland, France, Germany, Ghana, Greece, Hong Kong,Hungary, India, Indonesia, Ireland, Israel, Italy, Japan, Kenya, Malaysia, Mexico, Netherlands, New Zealand, Nigeria,Norway, Pakistan, Philippines, Poland, Portugal, Romania, Russia, Saudi Arabia, Senegal, Singapore, Slovakia, SouthAfrica, South Korea, Spain, Sweden, Switzerland, Taiwan, Tanzania, Thailand, Turkey, UAE, Uganda, UK, Ukraine,USA, Vietnam. Share this In Focus
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