Will mobile banking be an Atom bomb or damp squib?

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Article by:  Adjunct Professor, Swinburne University of Technology

The launch of Atom Bank in the United Kingdom in 2016 as a new mobile bank regulated by the Bank of England (BoE) heralded the onslaught of a variety of mobile-only banks in that country.

Given Australian bank customers are among the world’s fastest adopters of mobile banking, many observers consider Australia a prime target for this new type of disruption in traditional banking.

However, in the past decades we have seen the launch of a number of internet-only banks we were told would take the place of bank branches and break the existing business models of the mainstream banks.

In the UK ambitious online based banks were launched with names such as Egg(Prudential); Intelligent Finance (Halifax) and Smile (Co-operative Bank) all of which have now either disappeared or been incorporated under their original master brands.

In Australia UBank is a division of National Australia Bank which was launched in 2007 as an online bank with no branches. It is “aimed at self-directed customer segments that prefer to manage their own finances rather than seek advice” and to date has over 350,000 customers.

So the question is, will the new mobile-only banks be an Atom bomb for existing income streams or will they be a damp squib and another cost center for financial institutions?


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