This research commissioned by SAP was conducted in March and April 2013 with 3,288 respondents from four markets in APAC: China, India, Japan and Australia.

84%of APAC consumersare interested in buying goods and services through their mobile in the future more than any other region

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Appetite for purchasingvia mobile

Pay a bill

APAC LATAM

EMEA

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66%55%

52%

38%

Make a bank transfer

APACLATAM

EMEA

North America

63%54%

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Set up a new account

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EMEA

North America

58%49%

45%

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APAC consumers are embracing mobile wallet

moreof the APAC users used mobile to buy goods and want to do it

42%

BANKING

APAC 46%

LATAM 31%

EMEA 27%

North America 19%

Almostof the APAC mobile users used their devices to purchase products or services

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SAP Thought Leadership PaperBanking Industry

The Mobile Consumer A Thought Leadership Paper for the Banking Industry

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32 Thought Leadership Paper – The Mobile Consumer© 2013 SAP AG or an SAP affiliate company. All rights reserved.© 2013 SAP AG or an SAP affiliate company. All rights reserved.

Table of Contents

4 Introduction Methodology The Rise of MobileLevers for Mobile BehaviourLooking to the Future

9 Regional SnapshotsNorth America Latin AmericaEurope, Middle East and AfricaAsia Pacific

11 Next Steps: See Mobile Commerce in Action Dutch Bangla Bank LimitedStandard Bank South Africa

As available technology leads to growing levels of sophistication and complexity, consumers around the world are increasingly turning to mobile devices as a cornerstone for communication and transactions. Regional appetite for mobile services and applications varies dramatically and the ways that users transact and communicate via mobile depends on the activities undertaken.

This paper explores the SAP Mobile Consumer Survey, and provides guidance on additional resources to help develop your mobile commerce strategy.

© 2013 SAP AG or an SAP affiliate company. All rights reserved.

54 Thought Leadership Paper – The Mobile ConsumerThought Leadership Paper – The Mobile Consumer© 2013 SAP AG or an SAP affiliate company. All rights reserved.© 2013 SAP AG or an SAP affiliate company. All rights reserved.

INTRODUCTION

Introduction

Consumer adoption of mobile technology and reliance on sophisticated products and services has intensified in recent years. Mobile devices are becoming more complex in their functionality at the same time as the global mobile phone user is turning to their device and looking for an ever-expanding array of applications and services. A mobile phone now plays a key and multifaceted role in managing our lives. It aids us in communicating with others and, more recently, in financial transactions and management. In addition, this momentum continues to gain pace as a new era evolves where advances in smartphone technology and the merging of social, mobile and traditional marketing channels enable users to interact with brands and become engaged at levels not seen before.

However, appetite for mobile services and applications varies at a regional level,

and there are shifting elements of culture, economy and telecommunication infra-structure that impact on uptake or expansion of banking and purchasing through a mobile phone. It is crucial, therefore, that financial organisations looking to profit from mobile channels are able to meet consumer demands and provide new channels for banking and communication while ensuring that any service is intuitive and secure.

Over the last year there has been a huge shift globally in consumer owner-ship of increasingly sophisticated mobile devices, with three-quarters (72%) of mobile users in the survey owning a smartphone, while 43% retain a basic mobile phone. There has also been a move in mobile behaviour in terms of the complexity of activities with 63% of mobile phone users agreeing that they now use their mobile for activities other

than merely making calls and texting. In addition, while there are many competing channels for communication, half of users (50%) access the Internet at least once a day via their mobile and 55% of consumers choose to use their mobile phone when they want to pay a bill, make a bank transfer (52%), set up a new account (48%), and pay money to a friend or family member (48%).

This evolution in consumer behaviour also comes at a time when 36% of mobile users hold between three and five bank accounts, and a further 31% own six or more accounts. This further adds to the impact on financial services organisations in terms of investment in mobile interaction and payment solutions, integration of banking systems in the omni-channel environment, and covers the spectrum of transactions, loyalty and engagement.

THE MOBILE CONSUMER SURVEY

MethodologySAP commissioned independent research among mobile users across the four key regions of North America (NAM), Europe, Middle East and Africa (EMEA), Latin America (LATAM) and Asia Pacific (APAC), encompassing seventeen countries. Interviews were conducted with 12,424 adults aged 18+ who own a basic mobile or smartphone, with respondents completing an online survey in March/April 2013. Research was conducted by Loudhouse, an independent research agency based in London.

The Rise of MobileWithin the four key regions, the markets of Japan, the US, Germany, France, Australia and the UK have reached a level of mobile maturity. Users in these

markets do not necessarily see the urgency in new products and can appear reluctant to take up new services without consideration of personal benefit. Spain, Brazil, Russia, Colombia and Egypt are viewed as developing markets in regards to the extent that consumers use mobile devices. Enthusiasm for mobile products and services is somewhat stronger in developing markets than more mature markets, and this leads to an increased appetite for mobile phone use. However, it is the emerging markets of South Africa, India, Saudi Arabia, Chile, China and Mexico that show the greatest eagerness to take up leading edge technology and greater complexity of products and services. For these markets the use of mobile for communication, banking and purchase is evolving, albeit at a fast pace, and users are typically very keen to adopt.

Consumers have simultaneously witnessed an increase in the sophistication of mobile phones and an increase in the scope and variety of activities as users embrace the on-the-go flexibility of using a mobile. Half (49%) of consumers use their mobile to buy goods or services, and 48% use their mobile for banking transactions and account management.

Seven out of ten consumers (71%) agree that using mobile phones for pay-ment will become more important in the future. In large part, this is due to the convenience that the mobile channel offers, and the ability to communicate or perform transactions with a mobile whenever and wherever the user chooses. These are viewed as significant drivers for the increase in mobile adoption and usage. Consumers highlight the ability to use their mobile device any time of the day (51%), on the go (51%), with

Figure A% agreeing that, compared to 12 months ago, they use their mobile phone for more activities other than making calls and texting/sending SMS

87%

Mexico China Chile UKSpainBrazilRussiaColombiaEgyptSouthAfrica

IndiaSaudiArabia

USAGermanyFranceAustralia Japan

86% 84% 83% 80% 74% 69% 67% 66% 63% 63% 50% 47% 47% 44% 38% 37%

Emerging mobile markets Developing mobile markets Mature, saturated mobile markets

Figure BWhich of the following do you think are the main challenges, if any, of communicating and transacting with service providers through a mobile phone?

Hassle of having to enter a lot of personal information

I don’t think it’s safe

I might not have Internet access at that time

Lack of immediate customer service

The interface is hard to see

I’m not interacting with a human being

I am able to communicate with service providers

I don’t know how to do it

Another challenge not listed here

Don’t know

There are no challenges

46%

45%

43%

36%

27%

24%

21%

19%

8%

8%

6%

76 Thought Leadership Paper – The Mobile ConsumerThought Leadership Paper – The Mobile Consumer© 2013 SAP AG or an SAP affiliate company. All rights reserved.© 2013 SAP AG or an SAP affiliate company. All rights reserved.

speed (50%) and convenience (50%) as clear benefits for further adoption of a mobile channel for interaction and financial transaction.

Levers for Mobile BehaviourConsumers have different transactional requirements and preferences depending on the product or service, and the choice of a mobile channel for monetary activities can be further leveraged with marketing incentives by financial brands and organisa-tions. The global mobile user is encouraged to pay a bill using their mobile phone by a lower cost and personalised services. When setting up a new account, require-ments centre around in-depth help and a personalised service. Further highlighting the influence that brands and organisa-tions can have on the choice of channel, one third (32%) of consumers agree that their mobile payment activity will increase once they see more brands and services incentivising mobile payment methods.

Despite showing interest in purchasing and banking via a mobile channel, users do raise areas that they find challenging. Transactional activities such as paying a bill or banking are felt to be more difficult to conduct on mobile devices. Ease of use and the fact that consumers are put off using their mobile for purchasing or banking by the bother of having to enter a lot of personal information (46%) is a sticking point for many to increasing their usage. As well as requiring an easy-to-use interface, users believe that they require more confidence in how to use their mobile device as a payment method, with 39% agreeing that their mobile payment activity would increase once

INTRODUCTION

they had this support.Concerns around safety are also a key

barrier to further uptake and half of users say they would be encouraged to start or make more complex transactions using their mobile phone only when they have assurances about payment security (51%) and assurances about personal data security (48%). In support of this, 45% say that security doubts are a main challenge of communicating and trans-acting with service providers through a mobile phone. At a secondary level, the potential lack of Internet access at the point of purchase is raised (by 43% of respondents), and organisations will need to ensure that new products or services enable close to universal access.

Looking to the Future While 61% of mobile uers globally say it would not be easy for them to get to a branch of their main bank on a daily basis, 71% believe that it is important for them to access and manage their finances instantly. As such there is huge potential for the development of a mobile channel for financial transactions, and 82% of consumers say they are interested in buying more goods and services through their mobile phone in the future. Indeed, when thinking about how they would like to use their mobile phone, users describe a ‘mobile wallet’ enabling banking activities such as paying a bill (54%), checking their bank balance (50%), making a bank transfer (47%) and paying money to a friend or family member (38%). The global consumer now also expects that a mobile wallet would allow them the choice to pay with a variety of payment methods

or cards (40%). This enthusiasm provides a significant opportunity for financial brands to develop processes for future customer engagement.

Financial organisations have the prospect of witnessing great profit from the growing global appetite for mobile banking and purchase adoption. Brand loyalty will be essential, and the use of incentives alongside an easy-to-use interface will encourage consumers to undertake more complex transactions via mobile phone. Ease of use is a core principle that will accelerate user adoption and should not be overlooked at any stage of the services delivery process – 80% of consumers agree that organisations should use any available technology to make life easier for customers. However, it will be crucial for organisations to balance the desire for convenience, with data and personal security demands, and also ensure that they provide the consumer with education so that they have the confidence to move along the spectrum of purchase complexity. It is, therefore, crucial that as the mobile landscape for financial services transforms, brands and organisations must understand their customers better in order to fully realise and capitalise on the customer relation-ship. By doing so, mobile providers and brands will be better placed to engage users and create higher value services in the future.

Pay a billBuy goods online

Check my bank balanceMake a bank transferBuy goods in a shop

Buy goods costing a small amountTop up mobile phone credit

Check the status of an orderChoice to pay with a variety of payment methods or

Pay money to a friend or family memberResearch products, prices or tarrifs

Check usage data for my mobile phone accountEnable me to use loyalty cards

Respond to a promotion or make use of an offerCheck usage or submit usage data for utilities

Communicate with a customer service departmentSign up for a service or promotion

Change contact details or personal informationEnter a competition

Share contact details with friends or familySet up a new account

Buy goods costing a large amountNone of these

Don’t know

54%

51%

50%

47%

44%

36%

38%

38%

40%

40%

42%

46%

Banking activities

35%

33%

33%

31%

29%

26%

25%

25%

24%

24%

10%

9%

Figure CIf you were able to use your mobile phone as a ‘mobile wallet’, which of the following do you think it would enable you to do?

98 Thought Leadership Paper – The Mobile ConsumerThought Leadership Paper – The Mobile Consumer© 2013 SAP AG or an SAP affiliate company. All rights reserved.© 2013 SAP AG or an SAP affiliate company. All rights reserved.

REGIONAL SNAPSHOTS

Regional SnapshotsNorth AmericaThe NAM market is a mature market where mobile phone users have not necessarily felt the need to jump for the newest, more sophisticated device. As such, smartphone ownership recorded in the survey is lowest across all the regions at 52%, with 52% retaining a basic handset. Nevertheless, a third (31%) of NAM users use their mobile phone to purchase products or services, and 34% use their mobile phone for banking transactions and account management.

With one third (32%) of NAM users owning between three and five bank accounts and a further 45% having six or more bank accounts, financial account management is vital. Over half (53%) of NAM users believe that it is important for them to access and manage their finances instantly. Yet, 41% say that it would not be easy for them to get to a branch of their main bank on a daily basis and as such, 67% of NAM consumers agree that organisations should use any available technology to make life easier for customers.

Indeed, convenience is viewed as the clear driver for increasing consumer mobile adoption for NAM consumers. The fact that they are able to make a purchase, access their bank, or commu-nicate whenever, wherever, and quickly is a key benefit. To further encourage bill payment via mobile, NAM users look to incentives such as lower cost services (20%) and a personalised service (11%). However, it must be noted that currently 66% of NAM users say that nothing would encourage them to use their mobile to make bank transfers.

As with all markets, there are some barriers to overcome in NAM before further mobile transactional adoption will likely take place. There are concerns around safety, the hassle factor of having

to enter a lot of personal information and whether there might not be Internet access at the point of purchase. Nevertheless, there is potential for financial organisations to engage with NAM consumers, as 57% agree that using a mobile phone for pay-ment will become more important in the future. Indeed, when thinking ahead about their mobile and how they will use it, NAM consumers expect that they will be able to pay bills (38%), buy goods online (35%), check their bank balance (34%) and make a bank transfer (30%) using their mobile phone as a ‘mobile wallet’ for banking.

Latin AmericaMore than half (58%) of mobile phone users in LATAM access the Internet at least once a day via their mobile, and 47% have used their mobile for banking transactions and account management.

Over three-quarters (78%) of LATAM mobile phone users believe that it is important for them to access and manage their finances instantly, and 62% say that it would not be easy for them to get to a branch of their main bank on a daily basis. Furthermore, 86% of LATAM con-sumers agree that organisations should use any available technology to make life easier for customers.

Thinking to the future, three-quarters (78%) of LATAM users believe that using mobile phones for payment will become more important. Additionally, consumers expect that they will be able to utilise mobile for banking activities such as to pay bills (66%), make a bank transfer (61%), check their bank balance (61%) and buy goods online (61%) using their mobile in the form of a ‘mobile wallet’. Indeed, there is huge potential for finan-cial organisations looking to further develop the mobile channel in LATAM with eight out of ten (83%) consumers

interested in buying goods and services through their mobile in the future.

As with other regions, LATAM users cite mobile usage at any time of the day or night, the fact that mobile purchasing is quick and convenient and is something that can be achieved on the go as clear benefits to using a mobile for transactions. In addition, users believe that they would be further encouraged to pay a bill by lower cost services and a personalised service. Setting up a new account or making a bank transfer would be more reliant on a personalised service, which is very important to the LATAM consumer.

Financial organisations must be aware that increased usage of mobile banking could be affected in LATAM by the com-plication of having to enter a lot of personal information (53%), possible lack of Internet access (52%) and lack of immediate customer service (51%) at the point of purchase. In addition, the need for assur-ances around payment security (63%) and personal data security (61%) are higher in LATAM than global levels. With this in mind, any services and products must be secure while retaining an easy-to-use interface and ensuring universal usage.

Europe, Middle East and AfricaQuick and easy access to financial management is seen as vital across the EMEA region since 72% of users believe that it is important for them to access and manage their finances instantly. However, 62% say that it would not be easy for them to get to a branch of their main bank on a daily basis and, as such, 45% of EMEA consumers have used their mobile for banking transactions and account management.

Within the EMEA region, the adoption of mobile purchasing shows great potential and users expect that they will be able to take up banking activities such as pay

A regional perspective gives insight to help financial services organisations to turn information into intelligence. And intelligence into action.

1110 Thought Leadership Paper – The Mobile ConsumerThought Leadership Paper – The Mobile Consumer© 2013 SAP AG or an SAP affiliate company. All rights reserved.© 2013 SAP AG or an SAP affiliate company. All rights reserved.

SAP has a wide range of resources to help you develop your mobile commerce strategy.

SEE MOBILE COMMERCE IN ACTION

Dutch Bangla Bank LimitedWatch how DBBL set out to create a solution where customers in rural Bangladesh could manage money using their mobile phones to deposit and withdraw money as well as perform other financial transactions. Watch the video here.

Standard Bank South AfricaStandard Bank Group Ltd. built innova-tive mobile apps based on SAP Mobile Platform bringing financial management technologies to potentially 10 million new people. The bank dramatically expanded its customer base and reduced origination costs. Watch the video here.

Learn more about SAP SolutionsSAP’s highly-adaptable mobile commerce solutions for banks introduce a standard, easy-to-use mobile transaction channel that supports anywhere, anytime commerce services.

Learn more about SAP mobile commerce solutions here.

See how SAP can help transform your business with mobile apps here.

What the Analysts SayIn the 2013 Gartner Magic Quadrant for Mobile Application Development Platform, SAP is positioned as a leader. The report outlines that SAP’s early investment on mobility and substantial continued investment in mobile computing has enabled the company to build out a broad portfolio of solutions and the beginnings of a strong partner ecosystem. Gartner states that regardless of whether your enterprise is an SAP ERP customer, consider the SAP Mobile Platform if your enterprise is looking for a single vendor that offers a broad portfolio of mobile technology alternatives.

Read the report here.

Next Steps

LEARN MORE

The full survey reports are available here.

Explore the survey highlights in the interactivedata visualization website that covers the three main themes of the survey results: • Mobile Appetite: How cultural, economic

and technology norms shape the use of mobile around the World

• Mobile Opportunity: How addressing specific consumer concerns can expand the demand for mobile commerce services

• Mobile Motivators: Insight in to how consumers can be motivated to make greater use of mobile commerce services

Gain insight from industry leaders Learn how banks, mobile operators, retailers, utilities, and consumer products companies are effectively using mobile commerce to drive customer engagement and loyalty in The Mobile Commerce Guide: “Engage Customers and Build Loyalty in Developed and Emerging Markets”

The guide can also be found in the Apple iBooks store as a free download.

Additional resources SAP and IDG have created an informative three-part Mobile Playbook Series packed with data, insights, best practices, resources, and a checklist for developing a winning mobile strategy. Harvard Business Review and SAP have published a series of reports on how mobile can transform your business. This HBR Report explores how industries – from healthcare, financial services, and retail to agriculture, education, and manufacturing – are taking advantage of the latest mobile technologies.

bills (52%), check their bank balance (48%), buy goods online (47%) and make a bank transfer (43%) with their mobile phone in the future. EMEA users say that they would be further encouraged to set up a new account or make a bank transfer using their mobile phone by a personalised service and lower costs. Lower cost services are viewed as partic-ularly encouraging in the emerging and developing markets compared to the mature countries.

As with other regions, the fact that mobile purchase is quick (50%), available at any time of the day or night (50%) and can be used on the go (49%) are seen as clear benefits to using a mobile for purchase in the EMEA region. However, financial activities such as paying a bill and making a bank transfer are believed by EMEA consumers to be much more complex and difficult to achieve currently through mobile, leading to 81% of users believing that organisations should use any available technology to make life easier for their customers.

Accessibility and ease of use are also challenges to overcome when encouraging EMEA users to a new transactional product or service with concerns around the per-ceived difficulty of having to enter a lot of personal information (47%) and potentially not having access to the Internet at the required time of transaction (45%) raised. Further key challenges raised by EMEA users centre around a concern for safety, and there is a strong likelihood that the product or service infrastructure and security around personal information will be both a significant barrier to, or driver for, adoption particularly in more mature markets such as the UK, Germany and France.

Asia PacificUsers in the APAC market have been keen to adopt the increasing mobile

sophistication and, compared to other regions in the survey, show the highest level of smartphone penetration, particu-larly in China. Users have also accepted mobile functionality as a part of their daily routine, with over half (55%) of users in the region accessing the Internet at least once a day via their mobile. In addition, 46% of users have bought goods or services using their smart-phone in the last 12 months, and 60% use their mobile for banking transactions and account management.

There is a high level of bank account take up in the APAC region with 34% of users owning between three and five accounts and a further 44% owning six or more. Seven out of ten APAC users (70%) believe that it is important for them to access and manage their finances instantly, and 66% say that it would not be easy for them to get to a branch of their main bank on a daily basis. For this reason, 58% of APAC users have set up a new account, 66% have paid a bill and 63% have made a bank transfer using their mobile phone.

Over three-quarters (77%) of APAC consumers agree that organisations should use any available technology to make life easier for customers. The reasons that consumers choose to use their mobile for banking, purchases and transactions centre around the fact that they can use their mobile on the go, that it is convenient and can be used quickly both day and night. APAC users are further encouraged to consider using a mobile channel for paying a bill by marketing levers such as lower costs and a personalised service.

Further highlighting the enthusiasm for adopting new channels, seven out of ten (70%) APAC users believe that purchase by mobile phone will become more important in the future. Across the APAC region,

consumers expect in the future that they will be able to use their mobile phone as a ‘mobile wallet’ that enables them to utilise banking facilities such as pay bills (54%), buy goods online (53%), check their bank balance (52%) and make a bank transfer (47%).

However, as with all regions, the annoy-ance of having to enter a lot of personal information (45%), concerns over safety (41%) and lack of Internet access (39%) at the point of purchase are seen as key challenges preventing further adoption and usage of mobile purchasing. As such, any new service or product must centre around an easy-to-use interface while ensuring high levels of security and access.

NEXT STEPSREGIONAL SNAPSHOTS

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