ONLINE BANKING

Mobile Banking - Are You in the Game?

 

The vast majority of American adults, 86%, own cell phones, according to Javelin
Strategy and Research, and 19% of cell phone users chose smartphones in 2009, according to industry trade group CTIA - The Wireless Association. These
numbers suggest that today’s consumers are already taking advantage of all the tools they need to become the banking industry’s next mobile banking customers. This information was reported in Computer Services Inc. Online Newsletter, July 2010 edition, in an article titled “Mobile Banking is on the Rise.”

In a 2008 article by AP business writer Madlen Read titled “Mobile banking Gains Younger Users,” research firm Aite Group predicted mobile banking users in the U.S., by 2010, would rch 35 million. In fact, according to Tower Group, active mobile banking users in 2010 were estimated at 18.7 million.

A Forrester Research prediction cited in the Online Newsletter calls for over 53 million American consumers to take advantage of mobile banking by the end of 2013, an annual growth rate of more than 50% for the period 2007-2012.

In an article titled “Mobile Banking - Are You in the Game?” posted on TIB Ticker (www.mybankersbank.com) author Gary McLemore, vice president, TIB-The Independent BankersBank, Dallas, TX, writes that mobile banking is actually growing faster than online banking and ATMs did in their day. He says that most banks’ mobile banking platform “will be just an extension of their online banking service. But should that be the end of it? Some in the industry believe that approach is a limited one.”

McLemore mentions that Wells Fargo became the first “big” bank in February 2010 to make its text banking service available to all its customers, not just those who do online banking with them. Why, he asks, would Wells do this? Maybe, they can draw customers who do not have access to a PC to do their online banking; think nurses, teachers, construction workers, and many more, but who would use texting as a reason to bank with Wells.

McLemore identifies another approach gaining traction for consumer convenience, that is mobile person-to-person payments. He writes, “most
mobile banking software providers are teaming up with PayPal to make this
a viable product since PayPal already has millions of users.”

Frost National Bank in San Antonio, TX, introduced in May 2010 the addition of text messaging services to its Frost Mobile banking services. Frost said in a news release, its “... Frost Mobile text messaging ...makes Frost the nation’s first bank to enable customers to pay their bills by mobile customers actively sing their mobile banking platform, making it the most successful mobile bank in the U.S.

BofA launched an account balance tool via test messaging in April 2010 but not bill pay, according to an article by Christopher Calnan in the Austin Business Journal.

So, what does all this mean to community bankers if these predictions come to fruition?” the CSI OnLine Newsletter asks. “It means that most - if not all - of your internet banking customers will want to access their accounts from mobile devices by 2015.”

Lee Wetherington, director of strategic insight for ProfitStars, a division of Jack Henry & Associates Inc., Monett, MO, told bankers at the Oklahoma Bankers Association’s Leadership Forum and Annual Convention in Tulsa in May “that Generation Y, those born between 1978 and 2000, bought more bank products and services in the last 12 months than any other generation. They are more likely to sign up for and use new accounts and services online.” He predicted
that “banks that have the fortitude and foresight to make changes and move forward during the downturns (think current times) will be the ones that come out ahead.”

McLemore concludes his article by saying, “while there are still many questions about mobile banking.... one thing is certain: it’s time to think about how your institution will enter this game.”