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.
Mar 12
16
In a rare instance of mutual benefit, the fast-growing popularity of mobile alerts promises to keep consumers happy while actually saving banks money. No wonder smart banks are jumping on providing quality, secure options for receiving information about accounts, balances and cleared items via text, email and RSS.
I should point out that fast growing popularity is another way of saying fast-growing consumer demand. For once, we bankers can be grateful for something the market is forcing upon us. If only it worked out that way more often.
According to a recent article in Newswire Today, 40 percent of customer calls to branches and information hotlines pertain to balance inquiries. Think of it. The average customer service employee spends 16 hours out of a normal 40-hour work week looking up balances and cleared transactions while customers wait on the phone or in the branch. Ready for some math? If you take those 16 hours and multiply them times 50 weeks, you get 800 work-hours in a year. Multiply those 800 work-hours by the number of people you employ in those positions, and multiply that times the average hourly wage you pay them. That’s what it costs your bank to tell customers what checks have cleared and what their balance is.
Doubtless you will agree that it would be a heck of a lot cheaper for a computer to automatically transmit the same information.
In part, you can thank PCs and laptops for creating a favorable environment that allowed to flourish such a fortuitous opportunity to cut costs and increase customer satisfaction. Credit for its recent snowballing, however, goes largely to the growth of mobile device use. The number of Americans today without a mobile device is so small as to render them statistically insignificant. By now you can pretty much assume that all of your clients pack a mobile device. Equally significant, a recent report from mobiThinking.com shows that 25 percent of your customers use only a mobile device to access the Internet. That means that if you’re not offering a suite of mobile options and alerts, you are letting down one in four of your customers.
We can only expect the number of mobile banking users to increase. That is precisely why a number of banks are increasing options for consumers to receive information via mobile devices.
It more or less started with telephones. On the day that a customer happened to call the bank to inquire or conduct a transaction, remote banking was on its way.
Well, sort of on its way. Telephones at home and in the office became increasingly complex as the 20th Century rolled forth, but not much changed for remote banking until 1961, when City Bank of New York installed the world’s first Automated Teller Machine, and branded it the “Bankograph.” At last, true remote banking was on its way.
Well, sort of. Well, OK, not at all. Whether unimpressed, or simply reluctant to entrust their hard-earned cash to a box of gears and wires, New Yorkers avoided the contraption. Six months after installing the Bankograph, City Bank removed it — presumably with less fanfare than when they installed it.
But good ideas are not easily suppressed. An ATM-ish device appeared in Tokyo in 1966. Another appeared a year later in Sweden. More attempts followed in London and New York. By the mid 1970s, ATMs were becoming commonplace.
With a slowly-adopting public, you might wonder why banks kept trying. There were two reasons. One was that, though still newfangled, ATMs were no longer a novelty in the 70s. Rather, they were a sign of a forward-thinking, with-it bank. Moreover, though clients over 30 were not easily persuaded to try, much less trust a non flesh-and-blood teller at that time, the next generation was growing up with personal computers. Banks understood that its future customers wouldn’t fear technology. On the contrary, they would demand it.
The other reason? Imagine the tears of joy in the eyes of the first CFO who did a cost/benefit analysis on Automatic Teller Machines. Continuous availability, no sick and vacation days, no benefits package, enhanced security, and reduced error.
For a possible third reason … those who were around in the 70s couldn’t help admitting that those new ATM things were just plain cool.
At that moment, banks began complementing person-to-person interactions with person-to-machine interactions — and more and more customers liked it. Virtual/interactive/online banking was a natural next step as technology permitted.
The natural next step after that is mobile banking. No, scratch that part about “next.” It is upon us. Our customers want to be able to interact with their bank whenever, wherever, and however it’s convenient for them. If we don’t provide it, someone else will.