Mobile banking could be must-have option for consumers

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.

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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

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Topics: Enterprise Software, Mobility, Software

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  • RE: Mobile banking could be must-have option for consumers

    For those with an Android smartphone and a customer of Bank of America, Bajnk of America has an application for that. :)

    I'll leave the iOS/Windows Phone 7 users to know if there's a Bank of America application available for the platforms respectively.
    Grayson Peddie
  • I don't plan on ever using mobile banking

    Seriously, if you enter your receipts & checks into the checkbook (either "old-school" paper or a program like MS Money), you will keep track of over 90% of your transactions. For the automatic payments you have set up, you can either "man up" and remember to enter them in when they're due (i.e. I have memorized when my life insurance premium, Netflix and OnStar are due each month), or you can log into the bank's website from your home PC & have it update with any transactions you missed.

    There's no excuse for someone to say, "Whoa, I'd better check my bank account on my smartphone because I don't know how much I have in my account". If you don't know before you leave the house, then you're not being responsible with your money.

    And yes, that Chase commercial where the guy reaching for his wallet to pay his share of the check is made to look stupid because he can't use his smartphone to "pay" his friends instead is incredibly stupid. "Oooh, now my smartphone will have a record of not only my own bank info, but also all of my friends! That's super secure!"

    Oops, wait, I forgot the "/sarcasm" tag there...
    spdragoo@...
    • RE: Mobile banking could be must-have option for consumers

      @spdragoo@... I could never do all that background work on my finances. Online banking is pretty secure - I've never had trouble, and I've used Online Banking since 2000 approx. I now work in a Bank, and I serve countless customers that don't know how much they have in their accout - with or without Internet Banking. Not everyone micro-manages their finances like you, myself I know I have sufficient funds for any debits coming out of my account. As for my customers, well that's what we're their for, to offer them some better financial sense and to tailor our products to their needs.
      Graham Klerks
    • I don't plan on ever using mobile banking

      I should think someone who micro manages the why it sounds like you do would love it. I personally like knowing if something special comes up that I am looking for I can instantly transfer funds and get it. I have been banking online since it started. Never had a problem and never have had a problem with it on my phone. Time to get into the 21st century. :)
      nbkz81f
  • RE: Mobile banking could be must-have option for consumers

    my classmate's aunt makes $78 an hour on the laptop. She has been fired from work for 5 months but last month her income was $8845 just working on the laptop for a few hours. Go to this web site and read more... LazyCash9.com
    leon6600