Mobile banking market in China growing rapidly, report finds
There are 150 million Chinese using mobile banking services, transacting more than US$550 billion a year through their mobile devices, according to a Celent report published yesterday. China thus accounts for 40% of mobile banking users worldwide. By 2014, the Mobile Banking Trends in China report estimates the number of users to reach nearly 500 million and transaction volume to exceed US$1.8 trillion.
The Industrial and Commercial Bank of China (ICBC) and China Construction Bank (CCB) have the highest market share in mobile banking at 35.1% and 35.0%, respectively. None of the foreign banks capture a sizeable portion of the bank, although Standard Chartered introduced its so-called 'Breeze Living' app in April 2011 that combines social networking with loyalty programmes in addition to account visibility and transfer capabilities.
The report sizes the market for mobile shopping (or mCommerce) in China at about US$7.4 billion, forecasting it to top US$40 billion by 2015. At the moment, 5.3% of all electronic transactions are occupied by mobile shopping transactions, the report says. This figure is expected to climb to 12% by the end of next year.
When used for commercial purpose, Chinese users were most commonly found paying mobile phone bills with their mobile devices (over 50%), followed by the purchase of lottery tickets (30%). Around 10 to 20% of users make purchases in supermarkets and malls, pay utility bills and use public transport, the report finds.
Hua Zhang, analyst with Celent's Asian Financial Services Group and author of the report, highlights the value that data won through mobile commerce transactions offers to financial institutions. "Mobile banking in China is not only growing rapidly, it is enabling new business models," he says. "Mobile banking provides banks with massive amounts of transaction data, which they can analyze in order to develop new products and strategies."
Given the introduction of mobile network carriers and, possibly, third party technology vendors to the payment value chain, revenue from transactions through mobile devices is thought to be relatively small for financial institutions. One banker says: "The value proposition [of mobile banking] is not really revenue-based. What we are finding is key to large merchants is what we call Big Data and the analytics derived from [customer behaviour]." Another banker adds: "It's more a conduit to winning new shares of the customer's wallet rather than a fresh source of revenue in itself."
The 2012 World Payments report estimated the number of people conducting payments via mobile devices to have surpassed 141 million worldwide in 2011.
31 Jan 2013