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.”