New Westpac mobile banking report opens the window on how fast we are adopting it, the risks, and the opportunities for banks

Kiwis are adopting mobile banking fast - and far faster than they themselves realise.

More importantly, as fast as they are adopting it, they want to know why they can't do even more - in fact, everything - on their smart phone.

A new survey from Westpac claims that almost two-thirds of those surveyed think mobile banking "has created better awareness of their finances".

Even more remarkably, nearly one in four claim they are now "overdrawn less" because of their ability to stay on top of their bank account and the transactions that flow through it.

And more than half say there is no banking activity they wouldn't do on a mobile device.

In the past year, Westpac says banking on mobile and tablets has grown an astonishing 450%.

The rush to mobile is on.

And it is changing the way banks respond.

It is giving banks a huge new window into how we use their banking services.

And that is allowing them to tailor their services.

They are responding fast. Westpac is reporting that 40% of those who fill out an online mortgage application are new to Westpac.

That in turn creates a powerful incentive to know more from the data and to respond in a more personal way to these new prospects.

Capacity to 'know everything'

Westpac's head of retail banking, Ian Blair, says the bank is investing heavily in a "digital led, human based" transformation that puts staff at the centre of these new connexions with customers.

The bank now has the capacity to "know everything" about customers whenever and wherever they connect.

This gives new and powerful ways to execute and measure cross selling activity, tailoring it precisely to each individual customer.

It also gives them the opportunity to progressively intensify the contact until the customer signs up.

This year Westpac claims it is contacting customers 11.2 times on average, up from only four times a years ago. These contacts are more than just from mobile platforms, and include the very fast-growing use of email and SMS-text systems - all specifically "relevant" to the receiver.

The seamless linking of client contact "everywhere" is dramatically changing conversations from "transaction information", to "sales opportunities" - or in the bank's preferred language, more conversations more relevant to customers.

Westpac is aware of the risks these open, and seamless strategies pose to traditional banking. The main one is that it opens up the bank to disintermediation. Other providers who have a strong mobile presence could also "easily" provide such services - Telecom or Vodafone, or more importantly Apple or Google.

Blair says banks have a starting advantage of being an incumbent trusted channel, one they can build on by "listening to customers and being proactive".

Blair also noted that Westpac's strategies owe increasingly to what they are learning from international retail trends - while keeping a nervous eye on online retailers like Amazon. 

Westpac to feature in McKinsey mobile banking report

Less and less, claims Blair, they are looking to best practice from international banking trends.

In fact, he claimed an upcoming McKinsey review of best practice in mobile banking will feature Westpac New Zealand as a star case study.

The Westpac survey of New Zealand mobile banking use (attached here) shows most users are now checking their accounts by smartphone more often than two to three times per week, and are using the services wherever they are (including, ironically in the car).

Not only are customers not inhibited by security issues, Westpac claims that the bank's New Zealand experience is that online fraud has reduced every year over the past four years. (Cheque fraud is still the biggest risk even though cheque use has all but collapsed). Westpac claims its "online Guardian" two-factor security system has never been compromised.

The survey will be repeated and republished every six months.

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