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Payments 2012: Mobile Banking Users More Profitable and Loyal

Bank customers who use the mobile channel also tend to be more active ones, says SunTrust's Ginger Schmeltzer.

Those who use mobile banking are among the most loyal and profitable bank customers, according to Ginger Schmneltzer, SVP of digital channel management for SunTrust Bank.

Schmeltzer, speaking during a session at the Payments 2012 industry conference organized by NACHA - The Electronic Payments Association, said SunTrust's mobile bankers are 32 percent more profitable than those who don't use the channel and tend to be more loyal. Additionally, Schmeltzer noted they are more active checking account users, and more frequent users of ATMs, call centers and branches. "Generally, they are much more active clients," she said.

[Related: Mobile Payments Preferred by Consumers for Online Purchases: Report]

Schmeltzer was joined by Fiserv VP of Online Banking & Consumer Insights Geoffrey Knapp for the session, titled "How the Mobile Channel is Redefining Banking." Both Knapp and Schmeltzer noted that consumers are becoming more inclined to use the mobile channel for financial services, and not just for basic functions like checking balances, but also for more advanced transactions such as mobile payments. "Consumers are becoming more comfortable transacting in the mobile channel," said Knapp.

Knapp believed this is due to the level which the mobile channel has permeated the lives of consumers. As an example. he noted the various apps he could download via his television set. He added, perhaps only half-jokingly, that "it won't be long before refrigerators and washing machines" are connected to mobile devices.

Schmeltzer said given that mobile users at SunTrust often use other channels to interact with the bank, channel integration is key. She said as mobile banking continues to rise in popularity, financial institutions will have to focus on making the customer transition from mobile to branch to call center and elsewhere as seamless as possible, which can be a difficult proposition.

The continued rise in popularity of the mobile channel for transactions and financial services also means increased competition for banks from nontraditional institutions, such as PayPal, said Knapp. In fact, he noted that the San Francisco-based payments company has been "looking like a bank and acting like a bank for a long time now."

Schmeltzer noted that with mobile becoming such an integral part of many customer's interactions with their financial institution, banks must devote as much time and money to that channel as traditional ones. In fact, she said at this point banks shouldn't refer to mobile and online as "alternative channels" anymore.

"That's a pet peeve of mine," she said.

Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio

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