Technology has an increasingly important part to play in the future of both business and personal finance and the big four are already fighting over it.
NAB's (ASX: NAB) executive general manager of digital and direct banking, Antony Cahill, says the bank's new e-wallet program will be better than both ANZ's (ASX: ANZ) and the Commonwealth bank's (ASX: CBA) existing versions.
According to Mr Cahill, the mobile transaction app will allow you to not only use NAB's credit cards online but other banks and issuers cards as well. The system will enable two customers to pay one another over the internet through emails, SMS, social media and even by simply touching phones using Near Field Communication (NFC) technology. However although Apple's (NASDAQ: AAPL) iPhone 5 does not have the capability, it is expected on its newest version.
This is an exciting chapter for the banks and will allow them to tap into an estimated $US235.4 billion worth of transactions predicted in 2013. Since mining investment has been slowing and property financing not much better, the banks will be looking for new ways to make money.
Time will tell whether or not NAB's delay in producing the product will be detrimental but the fact that many people are still wary about placing their financial details online is perhaps the hardest part for the big 4. The banks' investment in easy to use mobile apps enables consumers to have on-the-go access with simplicity but will also try to entice cautious customers with low transfer fees.
Foolish takeaway
The banks have been cutting costs almost as quick as they have been cutting jobs. With little domestic growth opportunities in the near future, investors will demand higher dividends for their money. Don't be surprised if NAB and Westpac (ASX: WBC) manage to keep their high yields and increase dividends in the near future. Since CBA is renowned for its safety and ANZ has the only real international growth opportunities, they'll likely hold a higher price to earnings ratio.
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Motley Fool contributor Owen Raszkiewicz owns shares ANZ.
