The Impact of Mobile Banking on Barclays Performance - Assignment Example

Executive Summary

Mobile banking is a new technology that has benefited the telecommunication and banking sectors significantly. Its introduction in the 21st century has led to several benefits and impacts on banking and businesses. It has enabled consumers to access their bank statements, deposit checks, and transfer money easily and conveniently at any time and any place. This process has led to improved quality and reduced costs of banking transactions, meeting consumer needs, building trust and enhancing consumer satisfaction and loyalty. However, it has faced significant challenges in terms of security and safety issues as well as lack of trust from consumers. Barclays bank can overcome these challenges and benefit from mobile banking by developing a good mobile banking design focusing on simplicity and functionality to meet consumer needs. It should also develop an effective customer service department dedicated only to mobile banking to communicate with consumers and boost their understanding about how to use and transact safely using mobile banking. Lastly, it should collaborate with local mobile operators to offer mobile banking services to consumers who do not use mobile applications.

Introduction and Literature Review

Mobile Banking is a new technology that emerged in the 21st century to help people bank through their mobile phones. It refers to the process of disbursing banking products using mobile communication technologies. Literature shows various ways that mobile banking can be used to meet consumer needs. For example, Kim et al (2010) suggests that mobile banking meets consumer needs by reducing the costs of handling transactions because it is not necessary for the consumer to visit physical locations of the bank. Krishnan (2014) also argues that mobile banking can be used by bank consumers to access their account information easily so that they can make informed decisions regarding their transactions; hence promoting efficiency and satisfying the banking needs of consumers. According to Okiro and Ndung’u (2013) mobile banking acts as a differentiation strategy if it is used appropriately and uniquely; hence leading to increased consumer satisfaction, high consumer attraction and retention, and consequentially higher revenue and overall profitability. This report attempts to explain how Barclays Bank, UK can use mobile banking to improve its services by making transactions easier for customers.

Research Question

How can Barclays use mobile banking to meet consumer needs?

Critical Evaluation of Mobile Banking

Mobile banking has several benefits to banks and their consumers. The most important thing about mobile banking is that it brings banking services close to the consumer, hence boosting the service delivery and image of the organization. It makes transactions easier and faster because people can easily deposit, receive and send money at their convenience using their mobile phones (Lin, 2013). Mobile banking enables banking consumers to monitor their balances and statements, transfer and receive money, and deposit checks using their mobile phones (Lin, 2013). Despite these benefits of mobile banking, there are significant challenges that mobile banking is experiencing including lack of understanding/knowledge, security problems, and lack of trust (Lin, 2013).

As Barclays tries to implement Mobile Banking, it is confronted with the challenge of trust. According to The Financial Brand (2014), most banking consumers who do not use mobile banking services cite lack of awareness as the primary reason. Most consumers are not aware about the existence or how to use mobile phones. Consumers need to understand how mobile banking works and the security features and systems used by their banks in order to trust them (Zhou, 2012). Consumers do not trust mobile banking due to their perception of security risks involved in mobile banking. Transactions using new technologies have also been problematic in terms of security, causing caution from consumers to avoid such transactions.

In this regard, banking institutions should develop strategies to regain trust and positive perception of consumers about mobile banking. The Financial Brand (2014) suggests that the most successful strategy for meeting consumer needs through mobile banking is customer service. It allows consumers to understand the features of mobile banking in their banks, leading to increased understanding and trust about mobile banking (Krishnan, 2014). Banks should also use effective communication approach to enhance understanding of the use of mobile banking among consumers (Gurau, 2002). Communication will also enable consumers to understand the risks and benefits involved in mobile banking (Nicoletti, 2014). Banks and telecommunication companies should also use appropriate design to enhance secure and safe banking for customers.

Findings on Current Organisational Performance

The current performance of Barclays Bank regarding mobile banking is effective in meeting costumer needs but there are areas that need to be improved to meet consumer needs even better. In this regard, this study has found out the following:

• Barclays Bank has a mobile app that can be downloaded by consumers on their mobile apps to access banking transactions at anytime, anywhere.
• Mobile banking in Barclays is used by consumers to check balances, make payments, and receive money (Barclays, 2016).
• Mobile Banking Guarantee ensures that consumers are secured from fraud (Barclays, 2016). Consumers are refunded if their money are stolen using the mobile banking app.
• The app is downloaded by anyone with over 16 years owning an account with Barclays and an android, Apple of Windows mobile device (Barclays, 2016).
• Registration is easy and takes a few minutes (Barclays, 2016).
• For further improvement, Barclays could collaborate with mobile network operators such as Vodafone to make transactions without downloading any app.
• Customers may register for mobile through their mobile operator networks and receive alerts and make transactions using texts, e.g. by dialling *234# or any command number that is available with the operator (Okiro and Ndung’u, 2013).
• Mobile application design and customer service can make mobile banking more effective.

Discussion

Based on the literature and organisational performance of Barclays Bank, it is clear that mobile banking can have significant impacts on the company. First, it is clear that Barclays has a mobile banking strategy that can be used to meet consumer needs. The company has a mobile app where consumers can access their accounts, check their account balances, transfer money, and make payments (Barclays, 2016). This makes transactions easier and convenient, hence satisfying consumers and enabling the company to retain them and win their loyalty.

Literature shows that financial services customers prefer safe, secure, easy and convenient banking services. For example, M-Pesa in Kenya is enabling millions of customers to save their money in their mobile phones and send them easily without long processes of filling forms and queuing (Mbiti & Weil, 2011). Therefore, Barclay’s strength in safe, easy and convenient mobile banking can be used to develop effective mobile banking. However, there is an unmet market segment of consumers who are either uncomfortable with downloading mobile applications or do not have mobile phones that do not support mobile apps e.g. basic phones. Based on the findings of Mbithi and Weil (2011), M-Pesa in Kenya does not require any app to be downloaded. Customers only send command text messages to central system within the mobile operator where their transactions are controlled. Barclays can collaborate with mobile operators to support their unmet consumer needs of consumers who operate with their mobile operators directly without downloading any phone. Therefore, while the company is effectively using secure, easy and convenient

It is also clear that the company’s weakness is complex operations and management systems. This problem can be overcome by collaborating with mobile operators that have experience, specialization and resources to manage large ICT operations and transactions (Okiro and Ndung’u, 2013). This collaboration meets consumer needs because it enables the company to reduce its burden of managing large transactions, hence improving their service delivery to consumers (Okiro and Ndung’u, 2013). It reduces costs and time involved in banking, hence meeting consumer needs and reduces pressure of operational and managerial activities in the company.

Recommendations

Barclays Bank can improve its mobile banking by collaborating with mobile operators to offer mobile banking services rather than relying only on mobile applications that do not cover a large consumer base.

The design of the application should also be improved to ensure that the consumers can use mobile banking to meet their banking needs (The Financial Brand, 2015). The design should be functional and simple to ensure that consumers can easily access their financial needs anytime and anywhere.

Thirdly, Barclays Bank should develop an effective customer service to receive complains, requests and feedback from mobile banking customers. In this case, the company should develop a mobile banking department that offers effective customer service to inform, educate and train employees about how to use mobile banking services (The Financial Brand, 2014). This customer service department should be set up at the headquarters in UK and implemented using various means of communication including emails, skype, the social media and short text messages.

Implementation

The design and communication of mobile banking should be implemented through systematic steps. First, the company should develop a project team that will be responsible for the implementation. The team should first identify a suitable mobile operator with whom the company can collaborate to offer direct mobile banking services for the consumer. The team should then develop a budget and implementation plan to meet the objectives of the new strategy. It should then collaborate with the finance department to secure finance and resources to meet the budget. The next step is to execute the plan by building a mobile banking application and communicate it to customers to secure their support. Lastly, the team should monitor and evaluate the project to ensure that it is in line with the achievement of the set objectives to meet consumer needs.

Conclusion

Mobile banking has been found to be an effective strategy in meeting banking consumers’ needs in terms of cost reduction, easy and convenient transactions. However, its challenge is that consumers do not trust it because they perceive it to be unsafe and insecure. Lack of understanding or knowledge about the features of mobile banking causes lack of trust for the product. Barclays bank has made a good step to develop a secure, safe and convenient mobile banking through mobile application that can be downloaded by consumers on their mobile devices and used to access their accounts, transfer and receive money, and make payments. However, those consumers who are either unwilling or unable to download mobile apps are left out. Therefore, the company should collaborate with mobile network operators to meet their needs through instant text message command.