Apr 12
25
Mobile banking is quickly becoming one of the features customers factor in when shopping for a new bank. Mobile banking platforms add a new layer of convenience for on-the-go consumers, allowing them to inquire into their balance and transfer funds. But the results of a new report show that a new mobile banking feature may be one of the most sought out benefits influencing consumers’ banking decisions.
According to a study conducted by global business advisory firm AlixPartners, 39 percent of respondents cited mobile offerings as an important reason for switching to a new bank. In addition, 32 percent of consumers who defected from their primary banks in 2011 and are already mobile banking customers said mobile offerings were a significant attribute versus 6 percent of non-users who switched to a new bank.
In addition, customers who switched banks for mobile platforms cited mobile remote deposit capture features as the leading mobile offering they were interested in. The survey shows the number of consumers who said the ability to remotely deposit a check played a central role in their decision to switch banks increased 22 percentage points to 65 percent, up from 43 percent who gave the same response during the second quarter of 2010.
“Moving forward, consumers’ mobile behavior and expectations will continue to rapidly evolve,” said AlixPartners financial services practice managing director Theresa Epperson. “Financial services providers need to recognize the growing importance of rapid development and deployment cycles for mobile offerings, in order to both keep pace with consumer expectations, as well as to maintain relevance with today’s consumers who have an insatiable appetite for mobile-oriented innovation.”
Mobile banking adoption is expected to increase from its current 15 percent of customers to roughly 50 percent by 2016, giving financial institutions the opportunity to capitalize off a growing market and affording consumers the chance to choose a bank that offers a wide variety of benefits and convenience.
“Clearly, these devices’ extraordinary value to consumers has raised the bar on what consumers expect from their financial services providers and placed greater importance on the role of mobile banking in bank selection,” said AlixPartners financial services practice managing director Bob Hedges. “Those financial services providers that focus on mobile offerings as competitive differentiators will be winners in the future.”
Apr 12
19
As electronic wallets become more widely adopted and convenient payment methods for consumers, many analysts are questioning whether traditional payment types will become obsolete in the future. And the experts say, “Not without more incentives.”
The development of new electronic wallets is in full swing, with Google already creating a mobile wallet last fall that uses near-field communications technology to allow users to make contactless payments. The Internet giant teamed up with Visa, MasterCard, American Express and Discover to make this product available to credit cardholders, and there are a variety of terminals across the country that are now equipped to handle this payment method, according to BankTech.com.
AT&T, T-Mobile and Verizon have also teamed up to form the electronic payments platform Isis, which is set to launch this summer and provide some competition to Google, the news source reports. Although consumers are likely to have more electronic wallet platforms to choose from, experts say that incentives, and not variety, will drive Americans’ adoption of mobile payment systems.
Kumail Tybegee, Infosys’ mobility and digital practice senior principal told BankTech that Americans are less likely to adopt these mobile platforms without incentives because their current payment methods work now.
“Our system is not broken,” Tybegee told the news source. “It works really well. I can take out a card, swipe it and in an instant can transmit funds to a merchant.”
He notes that in order for widespread adoption to occur, developers, small businesses and other service providers will need to provide benefits to consumers, such as tying electronic wallet purchases to loyalty or rewards programs, offering discounts and even using them as e-tickets for sporting and entertainment events.
Mobile platforms, including banking, payments and purchases, are a growing industry, and the results of a new study show more Americans are trending toward this type of service.
A recent study conducted by the Consumer Electronics Association reveals 37 percent of individuals who own a mobile device – including tablets, smartphones and cellphones – conduct some level of mobile commerce, ranging from making online or in-store purchases to seeking out coupons and discounts from certain retailers. In addition, the study discovered that mobile transactions were spread out across a broad range of products, including clothing, music, books and electronics.
“The future of mobile commerce is very promising,” said CEA strategic research manager Jessica Boothe. “Consumers are open to new technologies as they continue to evolve and develop. With the growth of mobile devices, mobile commerce will play a more integral role in the everyday shopping habits of consumers, especially as they continue to seek bargains and comparison shop.”
However, there are still some concerns over the safety and security of mobile devices as a payment system that may be holding many consumers back, the study acknowledged. While 50 percent of survey participants said they do not use mobile devices to make purchases because they prefer other payment methods, 35 percent said they had security concerns.
“Consumers want assurances that their personal information is 100 percent safe and secure,” said Boothe. “They are not fully confident in technologies available.”
A separate report conducted by AlixPartners reveals that in addition to commerce, mobile banking is expected to increase significantly in the future, climbing to 50 percent of mobile users by 2016. As more consumers rely on this type of technology to manage their banking, credit and spending, retailers and financial institutions are scrambling to develop new systems and features to accommodate the growth.
Mar 12
6
Mobile features have quickly become one of the leading characteristics that drive a percentage of the American population toward certain financial institutions. However, analysts say that while mobile wallet usage is expected to increase in the coming years, widespread adoption may still be inhibited by questions over safety.
For this reason, it’s imperative for financial institutions to be more vocal about the safety features mobile wallets offers its customers. Consumer protections that exist for credit and debit cards may not be the same as those that are attached to mobile payments. However, banks that clearly broadcast the safety measures in place for financial transactions made through smartphones may quell users’ fears, while highlighting the convenience of mobile features, according to a recent MarketWatch report.
A separate report issued by USA Today also raises the need for merchants, financial institutions and wireless providers to work together to make mobile payments more appealing to a broader demographic of users. Recently, AT&T, Verizon and T-Mobile USA developed a joint venture named Isis, which will allow Chase, Capital One and Barclaycard customers to upload credit and debit information into the Isis mobile wallet, USA Today reports. Isis CEO Michael Abbot says the collaboration will be an important step in providing a simplified process to consumers. In addition to allowing customers to tap their smartphones to pay for products, Isis also offers loyalty points, discounts and coupons.
“Today, when is the first time a merchant knows when you’ve been in a store? When you leave,” Abbott told USA Today. “Imagine now that on top of that they can interact and say, ‘tap in when you walk in the store and we’ll give you X, Y and Z.’ Ask consumers what they want and they will tell you what they have. Our job is to give them what they never knew they needed.”