Since its inception, people have been asking if banks are getting into mobile banking as a way to keep pace with the competition or as a way of providing true value to customers and the institution. The consensus among bankers at a panel on mobile banking at Celent’s Innovation and Insight Day seems to be it’s a little of both.
Senior analyst Jacob Jegher moderated a discussion with three bankers and one alternative financial services provider. All agreed with what others in the industry have long been saying—that mobile is where the business is going.
Andy Arshad, mobile channel manager with USAA (San Antonio, Texas; $68.3 billion in assets), said as far as he’s concerned, mobile banking is not hype—it’s needed for serving his customers. USAA launched mobile banking about a year ago. Its customer base is unique as it consists of military personnel and their families. As such, this is a customer base that is "mobile" in more than one sense of the word. Since the company also has no physical presence, allowing customers to stay connected to the bank no matter where they are is paying huge dividends in terms of stickiness. Therefore, getting USAA’s members to connect via mobile phone wasn't too much of a stretch for the diversified financial services company.
"We are seeing great growth in mobile banking," Arshad told attendees. "We have a 12 percent adoption rate with one million unique users. Our mobile activity is double what it was seven months ago."
For Bank of America (Charlotte, N.C.; $2.32 trillion in assets), getting to 2.5 million m-banking customers took a bit more work in terms of conveying the value of m-banking to customers. Douglas Brown, mobile product executive with BofA, said the bank addressed three primary areas: ease of use, cost of use and security. As expected, the early adopters were younger and more tech savvy than BofA's average customer. However, he said the distribution of mobile banking use among the bank’s customers is evening out across demographics.
"It's incumbent on the industry to move to mobile," he asserted. "Our customers are moving to lower cost channels. The immediate access and control of one's finances [offered by mobile banking] resonates well in today's economy."
Denver-based Western Union’s Matt Dill, SVP, head of digital ventures, agreed that mobile is becoming the channel of choice for consumers. "The industry has to recognize this," he said.