By now you would think that mobile banking would be as ubiquitous as ATMs, branches, and online web sites, judging by all the ink and electrons that have been expended writing about it, but it seems that there are still some holdouts out there.
You know who you are. You're the ones in the categories that many analysts depict in their pie charts as "not offering yet" or "plan to offer." It is true that those pie slices are getting slimmer, but it's also true that it will take some time before that plate is empty.
For example, in a November report, Javelin Strategy & Research says mobile banking is on the rise, and is now used by 33% of mobile consumers, up from 24% in 2011. Of the top 25 U.S. financial institutions, about half are offering mobile person-to-person transfers and mobile remote deposit capabilities, a figure that has more than doubled since 2011.
That would indicate that two thirds of mobile consumers do not use mobile banking, and about half of the top financial institutions do not offer the advanced features mentioned.
Granted, the adoption rate is relatively pretty good. In a Mercator Advisory Group assessment, again in November, Ed O'Brien, director of Mercator's Banking Channels Advisory Service, comments: "Mobile banking adoption has accelerated at unprecedented rates, rivaling the speed-to-adoption of such consumer must-have products as telephones, dishwashers, automobiles, and color TVs."
Still, this is the 21st century. Assembly lines today are orders of magnitude faster than they were for the first Model Ts, let alone the first RCA Model CT-100 when it came out in 1954.
The Javelin report bores down into reasons why the adoption rate is what it is, and it comes down to what you might expect: extremely high customer expectations, and merely high delivery by financial institutions. It says that the number of consumers reporting problems accessing mobile banking services at their bank has more than tripled since 2009, from 4% to over 14% in 2012. Without access there is no mobile banking, the report dryly notes. A bank may actually offer mobile banking, but it may not be in the form that many of its customers want--i.e. they want it as an app, and the bank offers it only in the mobile web format.
Javelin reports that of those that do offer mobile banking, more than two thirds of them offer it through the mobile web, downloadable app, and instant messaging, all accessible through smartphones, feature phones, and tablets. But that means that one third still offer it in just two or even one of those three formats.
"Mobile access continues to improve, yet year after year more consumers say, ‘My bank offers it, but I can't access it.' Considering the multiplicity of devices that consumers use for mobile banking, providing access is a service provider's headache," says Mary Monahan, executive vice president and research director at Javelin.
ForeSee, which specializes in technology-driven customer experience analytics, in November turned its digital microscope on the mobile banking offerings of 17 financial services companies, including banks, credit unions, credit cards, and brokerages. It sought specifically to measure customer satisfaction with the mobile offerings of these businesses.
Results: Only the credit unions received an aggregate score of 80 out of 100, barely putting them above the "excellence" threshold for satisfaction. The banks measured were behind at 78, followed closely by credit cards and brokerages.
"As consumers put the power of the internet in their pockets and purses in record numbers, there is no doubt that the future of customer engagement is mobile," says Eric Feinberg, director of mobile, media, and entertainment at ForeSee. "The mobile experience represents the biggest opportunity-and the biggest challenge-for financial services companies because consumers are getting more comfortable managing their finances via mobile devices. The company that can best understand how to meet the needs of the mobile consumer is going to succeed, and that's going to require the right kind of insight. Right now it's anyone's game."
The Pew Research Center's Internet and American Life Project surveyed lots of people to seek just such an understanding-that of the relationship we have with our mobile phones. Although it doesn't focus specifically on mobile banking, the report provides an eye-opening picture of the attachment any potential customer has with his or her mobile device, to wit:
67% find themselves checking for messages, alerts, or calls, even when they don't notice their phone ringing or vibrating.
44% sleep with their phone next to their bed because they want to make sure they don't miss any calls, text messages, or other updates during the night.
29% describe their cell phone as "something they can't imagine living without."
39% of cell owners have had others complain to them that they do not respond promptly enough to phone calls or text messages.
33% of cell owners have complained that other people they've called do not check for calls or messages frequently enough.
The Pew researchers, in trying to make sense of this, generally characterize today's mobile users as having a love-hate relationship with their devices.
"Cell owners have become extremely attached and attuned to their phones, but many express ambivalence about that attachment," says Aaron Smith, lead author of the Pew report. "They love-and love to hate-the convenience and connectivity their phones afford. Although most would say that the benefits outweigh the costs, they freely complain about the downsides of hyper-connectedness, with the heaviest mobile users being some of the most persistent grumblers."
So what are you going to do? They can't live with them, they can't live without them. You do what you can.
ForeSee, predictably, advocates the Big Data analytics approach that they happen to provide. Its president, Larry Freed, points to "the importance of measuring customer satisfaction, which can help a company improve its customer experience. App store customer ratings and 5-star scale reviews might be interesting and entertaining, but they don't provide the kind of insights necessary for companies to distinguish useful feedback from the squeaky wheel."
Useful advice, certainly. Another, or maybe a concurrent approach, would be to continually update mobile offerings to provide what customers likely will want in the foreseeable future. Mercator's chart indicates that next-generation personal financial management offerings and specialized native apps probably will emerge as "must-haves" in the mobile space by 2014-2015. That might also include the P2P and mobile RDC features noted in the Javelin report.
Along with all that, maybe really insightful financial institutions will research their customer base to match what they may need with new products that are coming to market. Just as a recent example, Fundtech launched a tablet version of its CASHplus Mobile Corporate Banking solution, in order to allow banks to offer their corporate customers access to treasury services across multiple access channels, which the company says has a consistent and integrated user experience, and which is right-sized for the device.
That first RCA color television in its mahogany case weighed a ton, had a screen measuring 9 inches by 11 inches, and cost $1,000 in 1954. Very little network programming was broadcast in color for years. But the Joneses loved it, and everybody wanted to keep up with them. Now people can watch hi-def TV shows on their tablets for pennies.
The point being, mobile banking is on the same track, only at light speed. Banks without mobile offerings now have the chance to leapfrog the early adopters with even better, more tailored service. But they eventually have to take that leap.
Sources for this article include:
About the AuthorJohn Ginovsky is contributing editor of ABA Banking Journal and editor of the publication's TechTopics e-newsletter. For more than two decades he has written about the commercial banking industry. In particular, he's specialized in the technological side of banking and how it relates to the actual business of banking. He previously was senior editor for Community Banker magazine (which merged with ABA Banking Journal) and was a staff writer for ABA's Bankers News. You can email him at firstname.lastname@example.org