The Promotion of Mobile Financial Technologies with Banking and Payment Services

The use of the Internet by mobile devices has already surpassed that of desktops, and this fact already has a wide effect in various technology sectors. Financial technology companies are well aware of this change and are adapting to consumer demand for more mobile financial services.

Young people are increasingly using mobile banking and therefore visiting the physical branches of banks less and less. This generation represents a significant part of the working population and their behavior and preferences are expected to play a decisive role in the future of the banking sector, especially in terms of banks' work with their customers.

Mobile financial technologies and mobile banking and payments are achieving significant growth and have a bright future ahead of them.

Growth of mobile financial technologies

With the transformation of mobile devices into a leading channel for the use of the Internet, they also become tools for the consumption of various services, including banking.

As a result, the leading banks in the world and in the USA already have their own mobile applications that allow their customers to manage their finances mobile without visiting the nearest bank branch or even using a computer.

This was the first step towards the widespread deployment of mobile financial technologies, which now include peer-to-peer payments, all-digital banks, and digital wallets, which include more than just Android Pay and Apple Pay.

Growth of mobile banking

The payment sector is much more developed than other financial technology segments and is currently dominated by a small number of companies that offer payment services between merchants and consumers.

PayPal is the undisputed leader in digital payments in Europe and the United States, while Android Pay and Apple Pay already have solid positions in mobile payments in stores around the world. Strong local competitors for the latter two services are also emerging.

Digitized personal payment services directly between two people are also gaining in popularity. Some of the leading companies offering them, such as TransferWise, are valued at hundreds of millions of dollars. They are gradually displacing traditional money transfer companies from hand to hand.

Growth of mobile payment services

A recent study suggests that the volume of personal payments made via mobile devices will increase from $5.6 billion in 2014 to $174 billion in 2019, while their relative share will increase by 1% up to 30% within the same period.

Mobile payment applications have shown significant market growth over the last few years, with the volume, number of transactions and number of users expected to grow at an ever-increasing rate, as these applications offer quick and easy solutions related to daily payments.

Contactless payment with a smartphone, for example, is much more convenient than withdrawing money at an ATM to pay cash.

One of the leading digital wallet mobile applications in the US, Venmo, saw a 174% increase in transaction volume in the third quarter of 2019 compared to the same period in 2018. One of the factors for the success of the application is the so-called network effect, in which the usefulness of the service increases as the number of its user's increases. This comes from the fact that the digital wallet is convenient to use in various everyday situations, such as splitting a bill in a restaurant or renting an apartment by several people.

Growth of other mobile financial technologies

Other sectors, most notably insurance and investment, are also benefiting from the boom in mobile financial technology. Their introduction into insurance is just beginning to flourish, with the slowdown being attributed mainly to the high capital and regulatory requirements specific to the sector. Investments in insurance technology increased by 225% in 2019 compared to 2018.

In terms of the investment sector, robotic advisors for financial decision-making and investment portfolio management are the main carriers of innovation. It is expected that by 2020 they will manage global assets amounting to over 8 trillion.

There are three main models of robotic wizards but all are used for one purpose. Independent Robo-advisors use algorithms entirely to offer investment in specific stocks and solutions for the management of the client's financial portfolio. Their hybrid competitors offer a mix of automated recommendations and those given directly by people who are experts in the field. The most technologically advanced Robo-advisors use more complex and sophisticated algorithms to create and actively manage portfolios.

Thanks to smartphones and tablets, insurance technology and Robo-advisors are available to their users around the clock and are always at hand.

If you plan to modernize your business with a specially designed mobile application, make an inquiry to us.