Leaders in mobile banking are finding new ways to keep pace with consumers’ willingness to embrace financial services that match their mobile lifestyles.
Mobile banking often begins with alerts and information about account status, expands to include mobile transactions, and advances to person-to-person (P2P) electronic funds transfers.
Experts say learning from the financial leaders exploring these mobile banking applications can help credit unions develop services for members who want to use their mobile phones to perform financial transactions.
That’s important because these experts also predict mobile banking will shift from an interesting experiment just a couple years ago to a mainstream delivery channel by year’s end.
The coming year will most likely be the “tipping point” for mobile banking adoption, says Teresa Epperson, partner at Mercatus—a strategy consulting and investing firm that focuses on retail financial services.
She cites these indicators from Mercatus surveys of mobile banking users:
• Mobile banking adoption increased from 2% of survey respondents in 2007 to 12% at year-end 2010.
• “Baseline” mobile services are a critical decision factor for attracting new customers who lack mobile banking access.
Among those who don’t use mobile banking, about 20% of credit union members and 28% of large-bank customers say they’d switch financial institutions to obtain mobile banking services.
• Access to mobile banking motivated 40% of credit union members and 41% of large-bank customers to switch primary financial institutions.
• Mobile banking is a critical factor in the selection of a financial institution among consumers age 18 to 25. Half of them say it’s “extremely important”; another 17% call it “important.”
Epperson predicts an accelerating pattern of adoption where value-added mobile services play a key role as a competitive differentiator. Not only that, mobile transactions cost less to process than even online transactions (“Channel cost comparison”).
Next: The ‘triple play’