Mobile Financial Services have come on the scene as quickly and relentlessly as Kublai Khan’s hordes in the 13th century.
“The mobile space is moving more quickly than ever,” says Amanda Smith, manager of emerging products and integration at CO-OP Financial Services. “At a recent vendor showcase I attended, mobile technology was a recurring theme. The pace of change is a challenge to keep up with. I recently read that 84% of all financial institutions are prepared to invest in new mobile technology.”
Brian Day, director of digital strategy at TMG (The Members Group), sees the same trend.
“A small portion of credit unions are on the sidelines with mobile, taking a wait-and-see attitude,” he says. “Generally, though, most credit unions are already on board with mobile or getting ready to jump in. Consumers increasingly are demanding advanced mobile solutions. Therefore, every credit union should be investing in innovative solutions to meet that demand.”
Jeremiah Lotz, vice president of digital experience and payments at PSCU, is even more adamant about the need to offer mobile services. “Every credit union I can think of needs some sort of presence in the mobile space," he says. "Few consumers are not using mobile services. Every financial institution has to figure out how to serve them there.”
Smith says both members and credit unions drive the developments in mobile payments, citing a statistic that shows people touch their mobile devices an average of 150 times per day.
“What else besides blinking and breathing,” she asks, “do you do so many times per day?”
Describing one development that expanded mobile use even further, Smith cites Sept. 9, 2014, “the day Apple Pay threw a stake in the ground regarding how people pay with mobile devices.”
Everything else will revolve around it, she says, including mobile pay apps from Google and Samsung. “They will follow the front-runner in the market.”
Lotz says the big boys and girls have now entered a market that previously had been served by smaller players. “We’re all still on a quick ride in the mobile space. It continues evolving quickly, but with different players and focus.”
He says companies such as Google, Apple, Samsung, and PayPal are looking at the larger “end-to end” experience for mobile users.
“Before, a lot of smaller players focused on just one aspect of mobile, such as point-of-sale or rewards programs,” Lotz says. “But in the past year, we’ve seen mobile capabilities fleshed out so that customer, merchant, and issuer needs and expectations are all met.”
What members want
Smith says the wave of consumer clamor for mobile makes perfect sense, citing the phrase, “the ambient Internet of things.”
“This means that people are comfortable with digital technology because they’re surrounded by it,” she says.
As a result, financial institutions may start with a simple bill pay service and soon expand into a host of other capabilities.
“We also talk a lot about omnichannels,” says Smith, “where credit union members have a seamless experience across all channels—PC, tablet, smart phone—and the ability to start a process, such as a loan application, on one channel and finish it on another. Mobile platforms are heading toward great integration.”
Smith has run into some surprises as she tracks mobile device use. “Interestingly, we’ve found that people in the 45- to 54-year-old demographic adopt mobile tech as much as younger people. Millennials are always cited as the biggest cohort of adapters, but that figure shows otherwise.”
With that demographic in mind, Smith advises credit unions to remember three things when offering mobile services:
Lotz adds that credit unions need to encourage and enable members to participate in their mobile space offerings.
He says they can do so by focusing on:
Overall, service providers agree that most credit unions aren’t shying away from mobile.
“Credit unions have a high level of awareness of the major products in mobile payments, and they’re ahead of the banks in terms of getting information and apps to their members,” says Day. “Evidence of this can be seen in Apple Pay adoption: As of June 2, credit unions accounted for 66% of the financial institutions live on Apple Pay, while banks represent 34%.
“Credit unions understand the market and know how to create incentives for their members to move their credit cards to front of wallet, particularly those associated with reward programs,” he continues.
Credit unions also have been good at educating members about how to use mobile apps, Day adds.
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