The number of mobile phone subscribers that use their phones for mobile banking transactions will increase to more than 150 million globally by 2011, according to a study by Juniper Research.

The Juniper report determined that the mobile banking market is currently most advanced in the Far East, but that growing numbers of mobile banking services are being offered in North America and Western Europe. In fact, developed nations of the Far East, North America and Western Europe are forecast to account for over 70 percent of the user base by 2011.

"The 150 million refers to established banks that are extending their channel choices to customers," said Howard Wilcox, an analyst at Juniper, Basingstoke, Hampshire, Britain.

"Banks are realizing that their customers can't be reached profitably with branch-based banking, especially in developing countries," he said. "Transformational banking addresses those people that don't have bank accounts but do have a mobile phone."

Additive banking adds further choices or distribution channels for banks to serve their customers or make the banking experience more convenient for existing customers.

Transformational banking is about extending banking services to customers who cannot be reached profitably with traditional branch-based financial services--typically these services exploit the ubiquity of the mobile phone and are more focused on developing countries.

"Transactional or pull mobile banking is being offered increasingly by banks via downloadable applications or the mobile Web, complementing existing SMS push messaging services for balance and simple information enquiries," Mr. Wilcox said.

"Mobile banking is a key element in banks' distribution channel strategies as they compete to attract and retain customers," he said.

The Juniper report highlighted the extra user convenience as a key benefit.

The mobile phone is the device that people will not leave home without.

Mobile banking is an addition to the wide choice of applications and services that consumers can access through their handsets to make life easier, especially via smartphones such as the iPhone.

However, there are several factors that will need addressing to really foster market development including financial regulations which vary from country to country, application slickness and security.

Whatever the reality of the strength of the security, it is the perception and image in the mind of the user that dictates whether they will trust the service.

"From a volume perspective, to reach the most people, a mobile Web-based service is the way to go, but downloadable apps also have a key role to play," Mr. Wilcox said. "It's up to the whole ecosystem to come up with apps and services that people are confident and comfortable using."