Bankers across Europe believe that mobile devices will transform the retail-banking landscape in the next three to five years. In a recent survey of European bankers, however, a majority of the respondents acknowledged that they are not investing sufficiently to take advantage of the opportunities and that telecommunications companies and other nonbanks are leading the way.

These findings—based on joint research by McKinsey and the European Financial Management and Marketing Association (EFMA)—come on top of an additional analysis suggesting that mobile devices’ overall economic impact on the banking industry may be neutral at best. Individual banks should be able to increase their revenues and cut costs if they successfully exploit the convenience of mobile, its potential to drive digital commerce, and the opportunity it represents to target the unbanked in emerging markets. Some banks, however, may find that mobile adds to costs and erodes prices unless they offer a truly differentiated product or service.