Mobile banking could be must-have option for consumers

Summary:Over twice as many consumers at the nation’s largest banks are using mobile banking more than are those at credit unions, according to a new report.

Over half of mobile phone owners will be using mobile banking within the next five years, according to a new report from Javelin Strategy & Research.

The study, entitled "Mobile Banking, Smartphone and Tablet Forecast: 2011?2016," focuses on mobile and tablet banking discrepancies between big banks and small community banks or credit unions.

In 2011, 29 percent of mobile phone owners were mobile banking users, but Javelin researchers expect a much more serious and rapid increase as mobile phone usage itself rises. Take a look how it is demonstrated in the graph below:

The major takeaway from the report is that mobile banking has the potential to be a huge make-or-break option for financial institutions in the same way that a recent Cisco report argued how important access to social media is for young professionals.

That means as 92 percent of the largest 25 banks in the U.S. (by deposit size) offer mobile banking, institutions that lack mobile banking risk losing valuable customers to those that offer it.

According to the survey, over twice as many consumers at the largest banks (over $750 billion in deposits) are using mobile banking than are those at credit unions.

Here's how it breaks down. At the nation’s four largest banks, 37 percent of customers used mobile banking at some point during the last 90 days compared to approximately 22 percent at midsized and regional banks and just 14 percent at credit unions.

Obviously, larger banks more resources and greater demand that smaller institutions do, thus they can more likely offer and support mobile banking solutions.

Nevertheless, given how volatile the economic climate is, this isn't a time for a bank of any size to be caught unprepared when it comes to what customers want.

Although security is definitely an issue and probably a deterrent for some customers afraid of using mobile banking, another recent report from comScore found that more and more Americans are warming up to it. Attributing factors could be the rise of smartphone and tablet sales, not to mention the sheer convenience of it.

Graph via Javelin Strategy & Research

Related:

Topics: Enterprise Software, Mobility, Software

About

Rachel King is a staff writer for CBS Interactive based in San Francisco, covering business and enterprise technology for ZDNet, CNET and SmartPlanet. She has previously worked for The Business Insider, FastCompany.com, CNN's San Francisco bureau and the U.S. Department of State. Rachel has also written for MainStreet.com, Irish Americ... Full Bio

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