financial services

Mobile Banking Rising, But Not 'Game Changer'

Banking

Consumers are becoming more accustomed to mobile banking services, but that doesn't mean they play a large role in their banking decisions.

According to a survey of more than 1,000 U.S. adults by IDC Financial Insights, mobile banking usage has doubled in the past year. But mobile banking is still not at a point where it could be a game changer for the financial industry. "Although usage has doubled, the numbers are still fairly low," Marc DeCastro, research manager of consumer banking and credit at IDC, tells Marketing Daily. "There's still not a lot of marketing or push or customer adoption."

For many banks, mobile banking is still a service, rather than a customer acquisition strategy, DeCastro says. Like ATMs, debit cards and online banking before it, customers are demanding the service, but it does fall within a certain consideration set when consumers are looking to open accounts.

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"There's a window where branches aren't losing customers because of it," DeCastro says. "As the younger demographic enters the workforce, they may be demanding it [in the future]."

But that future could be several years off. The younger generation just entering the workforce (and who are more accustomed to mobile services for everything), aren't necessarily the high-value customers many banks are seeking. And though there had been desire in the past for banks to secure customers early for long-term relationships, "loyalty is not as prevalent as it used to be," DeCastro says.

Even the proliferation of smartphones may not influence mobile banking as much as some might have predicted, DeCastro says. With the ability to do so many different things on a smartphone, from checking and writing email to social networking and gaming, banking drops to about "the fifth thing I can use my [smartphone] for," he says.

Still, banks that ignore the mobile channel do so at their peril. Like the ATMs, online banking and debit cards before it, there will come a time when consumers will pass up institutions that don't offer mobile access.

In the meantime, those companies should begin expanding what they offer, market those offerings as easier to use and provide more opportunities for mobile payment and fund movement, DeCastro says.

"The barriers for entry are low and a lot of banks are putting things together to have something ready," he says. "I think in the next few months, you're going to see offerings explode."

1 comment about "Mobile Banking Rising, But Not 'Game Changer'".
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  1. Kevin Horne from Verizon, July 14, 2010 at 8:48 a.m.

    "Still, banks that ignore the mobile channel do so at their peril." Name a major bank that isnt active in the mobile banking space.

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