Imagine you are a bank with no branches or ATMs, almost three million customers and only 195 employees in total. This is e-bank Japan, which provides 24-hour real-time electronic services. With a corporate vision that mobile computing can give customers their own personal branch in the future it is an example of a company that has totally automated its business using the latest technology. Japan may be the first to adopt this kind of technology, but it is something that could make sense in the UK too. After all, e-bank Japan has about 200 staff, of which 30 are internal IT staff, yet it manages almost three million customer accounts. The combined attractions of reduced costs and increasing customer demand could drive mobile banking adoption in here post credit crunch.
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"Asia is a major success story for mobile banking," says Robert Morgan, consultant at Hamilton Bailey. "Many rural people in countries such as India do all their banking by mobile. The West has been lackadaisical because we like to touch things."
He says banks in the UK can accelerate the adoption of mobile banking as the credit crunch forces them to cut costs. By automating more of the banking processes more staff cuts can be made. "The way the credit crunch has gone, with banks making cost reductions, mobile banking is on the horizon. The age of mobile banking will allow banks to make front office savings."
So how does it work at e-bank Japan? "Most of our services can be completed by PC, so we just focus on the transaction processing system to keep operating smoothly," says Kaz Saiki, head of public relations at the bank. "That is why we can manage 2.8 million customers' accounts with fewer than 200 staff."
If e-bank Japan customers want to withdraw cash, they can use ATMs of companies the bank has agreements with.
Because the bank is designed and run for customer convenience its processes are largely automated. Opening a new account at a traditional bank takes time and requires the applicant visiting the bank to fill in lots of forms, go through manual verification checks and then receive confirmation by post. Human involvement and additional cost all the way.
At e-bank Japan, applicants do not need to fill in application forms by hand or visit the bank, says Saiki. "They can do all of it by sending applications by PC and mobile phone. It is necessary to send identification, but they can send the picture on their driver's licence or other ID using a camera function of a mobile phone, which is legal in Japan." The company uses a optical character recognition system and digital data to confirm identity.
One of the major attractions of e-bank Japan is that it offers services via mobile phone which opens it up to many more people, says Chris Skinner, CEO at financial services think-tank Balatro.
"They used to be restricted to targeting internet users," he says. "The result of using mobile is that e-bank has now extended its reach far beyond the internet user to the general population, because the general population all use mobile telephones and just think of e-bank as an application on their phone."
There is no stopping the mobile revolution, and e-banking via a mobile phone looks set to take off, according to market analysts. IMS Research says mobile banking users will reach almost a billion within four years and will complete 62 billion transactions in 2012. It said the combination of contactless mobile payments, mobile banking and over-the-air payments will push the number of mobile banking users to 884 million in 2012.
There will inevitably be obstacles to the adoption of mobile e-banking and Alistair Newton, at Gartner, believes security is still an obstacle to its take up.
When the credit crunch dust settles banks will look different and will have new strategies. If customers do demand mobile banking and it can offer savings, the banks will surely add it to their services. With 200 staff in total and about three million customer accounts e-bank Japan is a case in point.
Japanese internet banks market share for
35% Japan Net Bank
12% Sony Bank
2% SBI Sumishin Bank
23% Under 30
38% 30-39 year olds
25% 40-45 year olds
14% Over 50