Smartphone apps popular but vulnerable
Interest rates aside, the new battleground for Australia's banks is mobile banking, with financial institutions falling over one another in the race to deliver new apps for different mobile computer platforms such as the iPad and smartphones.
Speakers at the 5th Future of Banking and Financial Services conference, held in Sydney last week, repeatedly stressed the growing importance of mobile banking.
Chris Smith, the general manager of digital at NAB, said: "Within five years, the mobile channel will become the most significant channel for the banking industry." He pointed to a 2013 inflexion point when smartphones were tipped to outsell PCs.
"It will become almost mandatory, you will see people switching banks because there is no iPad or iPhone app," he said.
Smith also stressed that browser-based mobile banking would not cut it, as the speed of native apps was far more compelling for users.
The challenge for banks would be to pick which platforms they wanted to develop apps for as the smartphone market is currently very fragmented with phones such as the iPhone, Android-based phones, Nokia's Symbian, Blackberry and Windows Mobile 7 all jostling for position.
While the iPhone remains the smartphone banking platform of choice in Australia, there are signs that its star may be on the wane with Google's Android now growing fast. St George was the first local bank to launch an Android-based banking app ten days ago and will also shortly unveil an app for the Blackberry Torch.
Its experience with mobile banking has been very favourable, according to Rob Chapman, St George's chief executive.
He said there had been more than 100,000 downloads of its apps for the iPod Touch and iPhone. He added that 130,000 people were regularly using mobile banking, with the system handling 600,000 log-ons per month.
"We are handling 250,000 transactions a month from mobile - which is equivalent to 40 branches - and handling a million inquiries a month. It's taking low-value transactions out of the network," said Chapman.
Visa is also getting in on the mobile phone act. Chris Clark, the regional general manager for Visa International, said the company had been trialling a public transit ticketing system in New York and New Jersey using iPhones.
Clark believes mobile phones will eventually come equipped with NFC chips and applications. (NFC is near field communications technology as used in Visa's PayWave cards).
In the meantime, Visa's New York trial uses an iPhone equipped with a specially developed "skin" featuring NFC technology that allows for automatic payment of train tickets.
Not everyone at the conference was convinced of the innovation mobile phone-based banking represents, however.
Simon Millett, the director of banking at CSC Australia, dismissed as "fancy toys" the systems banks are developing for mobile banking. "You've got to be desperately concerned about the security aspects," said Millett.