Commercial banks are eyeing mobile banking as a potential way to harness growing demand for online transactions, industry experts say.

Despite accounting for only a small portion of total market transactions, mobile banking is fast becoming a must-have product offered by Vietnamese banks.

"Mobile banking has been and will be an indispensable product for the banking sector," said Manager of Bac A Bank's Card and e-Banking department Pham Dang Khoa.

Nguyen Chien Thang, manager of internet banking at Sai Gon - Hanoi Bank (SHB), agreed that mobile banking will be favoured by Vietnamese consumers.

A rapid increase in the number of mobile subscribers, cheap smartphones, improving network infrastructure and a young population are key factors driving the development of mobile banking, he said.

Both representatives from Bac A Bank and SHB agreed that mobile banking has advantages over other products.

Thang said modern technologies integrated into smartphones will allow customers to make transactions whenever and wherever they need.

Banks need to provide applications for customers and offer them technical support to improve the quality of mobile banking, he added.

Meanwhile, Khoa believed that young consumers will be the focus of banks given the ubiquitous use of smart technology.

However, the biggest challenge facing mobile banking is how to approach customers, according to both managers.

"The banks have to design the application in the simplest way and instruct their customers to set it up on their phones," said Thang.

Khoa added that the youth is not the ideal group for product segmentation since they are not the ones with highest demand for banking products.

Additional obstacles lie in maintenance and large investments are needed to integrate current services with mobile banking, Khoa said.

However, the opportunities to deliver mobile banking to customers are increasing, according to Thang.

Around five years ago, modern technologies like smartphones, 3G connections or online payments were a rarity not trusted by customers.

Services requiring non-cash payments were even avoided by customers because of lack of confidence and credibility in online payment systems.

Thang said he believes that the success of mobile banking could eclipse internet banking in the near future. However, the Government has a role to play in creating confidence by creating a transparent legal framework, he said.

The popularity of mobile banking among consumers will also lie in the designing simple online applications that are secure and customer-focused.

However, banks should be patient and listen to their customers to improve the creditability of their products, said he.-VNA