CUs and Mobile Monetization

Go beyond basic mobile services to recoup costs, grow income.

December 13, 2012

The mobile industry is poised for explosive growth. The Yankee Group projects up to 500 million people will use mobile banking services by 2015, with mobile transactions exceeding $1 trillion in value worldwide.

Businesses and consumers alike are looking for personal financial management on their mobile devices—while credit unions are evaluating how they can capitalize on this market opportunity.

The way financial institutions provide financial services is changing. According to research by Nielson Mobile Insights, smart phone penetration surpassed feature phone penetration in February 2012, and the use of tablets is growing at the unbelievable rate of 400%.

With the widespread adoption and rapid growth of mobile technology, services that were once considered “optional” are now deemed a requirement by most consumers and businesses.

Credit unions that wish to remain competitive must level the playing field by quickly implementing basic mobile banking services such as viewing account balances and making account transfers.

Although members are demanding these services, most are unwilling to pay for them. This poses quite the challenge for credit unions: How to justify buying technology that has no direct return on investment.

Peter Aycliffe, chief executive at Visa, recently stated that by 2020 more than half of all transactions will be made using mobile technology.

So how can financial institutions recoup some of the costs for investing in this technology?

There's a variety of mobile banking services that provide additional value that members will pay for.

Mobile remote deposit capture (RDC) is certainly a service to consider offering for a fee to consumers. While some credit unions provide this service for free, others are charging without member complaint.

Many find that the convenience of not having to drive to a branch to make a deposit is well worth the cost.

In addition to creating fee income, mobile RDC allows financial institutions to reduce check processing costs. Mobile remote deposit costs vary greatly depending on the source, ranging between four cents and 59 cents per item. But check processing costs average between 75 cents and $3 per item.

The biggest opportunity credit unions have in charging for mobile services: Member businesses. These services must go far beyond account balances, histories, transfers, and deposit services, however, for these members to be willing to pay.

Applications that address the paper-intensive world of critical business functions are the key. These include mobile services that help streamline functions such as customer invoicing, accounts receivable posting, and payment processing.

Mobile continues to be a game changer, and the value-add for these types of services is vast. Businesses can save as much as 15 minutes per transaction when electronic processes replace the paper-based, labor-intensive processes of writing up invoices, hand-keying information into back office accounting systems, and manually preparing and taking deposits to the credit union.

Further, funds are deposited and accessible immediately instead of being accumulated at the end of the day—or worse—over the course of several days.

Financial institutions can play an active role in the success of businesses in today’s marketplace and create new revenue streams by offering sophisticated mobile solutions that address invoice creation and delivery, and back-office and payment processing.

As mobile adoption, mobile banking, and mobile payments continue to grow at unprecedented rates, now is the time for credit unions to break into the small-business mobile banking market and capitalize on the opportunity to monetize mobile.

This is the perfect opportunity for credit unions to enable their member businesses to be competitive in a rapidly evolving, multichannel commerce environment.

DEBBIE SMART is senior vice president, product management, at Aptys Solutions, Rockwall, Texas. Contact her at or 801-204-9008.