Even ATMs could be becoming obsolete as mobile and Internet apps take the banking world by storm. Photo: Kim Kyung-Hoon, Reuters
Even ATMs could be becoming obsolete as mobile and Internet apps take the banking world by storm. Photo: Kim Kyung-Hoon, Reuters

The world is changing rapidly.  This is primarily because of new technologies becoming ever more integrated into our lives. Perhaps this is more true in many developed Asian cities than in some other parts of the world, as new technology is, typically, embraced more quickly and accepted more easily by their tech-friendly, young, educated, ambitious populations.

We can see this evolving dramatically in the financial-technology sector. And it looks as though the days of traditional banks that focus on physical branches are numbered.

Money is pouring into app-only banks across the globe. Indeed, Hong Kong billionaire Li Ka-Shing was among the investors who raised US$40 million for a major European-based digital-only bank.

The number of people who have switched to mobile banking apps to manage their finances has boomed across Asia over the past few years. Figures doubled between 2011 and 2014, with this trend set to rise to 1.8 billion users by 2019, the main driving force being Southeast Asia.

As we have seen, the banking sector is experiencing a fundamental shift. Customers no longer revolve around banks; in essence, customers are in the centre and banks have to revolve around them to get their attention.

As such, people are turning to smartphones and tablets more often than ever before to carry out banking activities – and visiting branches and using telephone banking services far less frequently. In essence, your smartphone has become their bank.

The rise in usage figures is attributed, it can be reasonably assumed, to the speed with which information can be accessed and transactions undertaken. Apps are becoming more and more popular because of this convenience and to increasing security; there is more choice than ever before, and people are becoming increasingly tech-savvy.

In addition, almost all aspects of financial management are now more user-friendly, accessible and dynamic with mobile app banking. People can check their balance in five seconds from their phone, rather than having to travel to the nearest automated teller machine or branch. This is highlighted in a survey carried out by McKinsey and Company, which revealed that consumers across Asia now connect with their banks over the Internet or via smartphones more often each month than over traditional channels, such as cash machines and branch visits.

In emerging Asia, these traditional channels still dominate, but even there customers are using Internet and smartphone banking almost five times more often than five years ago.

As such, opening a bank today with branches would be similar to using typewriters in an office rather than computers, or writing checks to make payments.

The world has moved on.

Therefore, it is highly likely that both investors and users will benefit immensely from ultra-accessible mobile banking apps, which, it can be rationally argued, will see physical banks become obsolete in the future.

Nigel Green

Nigel Green founded deVere Group in 2002 from a single office in Hong Kong after discovering a niche market for expatriates in the financial services sector. Since then, it has grown to become one of the largest independent financial advisory organizations in the world with offices and clients across the globe.

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