Friday, May 30, 2008
Mobile Banking Moving into the Fast Lane
byConsumers, start your cell phones! Mobile banking services in the U.S. appear to be poised to triple by 2009 (Aite report), or to double by 2010 (Sybase report). Despite research finding differences, one thing is clear: U.S. banks are ramping up efforts to make consumers aware of mobile banking, consumer clearly want the service, and that means bank marketers are ready to put technology and marketing dollars behind it to get you the consumer to adopt it.
As reported in American Banker (registration required), the Sybase study shows that only 10% of US banks surveyed offer mobile banking services now, but more than 50% expect to offer the services in the next two years.
The Aite report suggests the percentage of online banking users at large banks who use mobile banking will climb from 4% in 2007 to 13% in 2009. The report also says the share of online banking customers enrolled to receive alerts from mobile Short Message Service, or short text messages between mobile devices, will grow from 5% in 2007 to 12% by 2009.
Reasons cited in the surveys for banks pursuing mobile banking strategies include increasing consumer awareness to drive adoption, improving customer service, extending Internet banking and increasing competitive advantages.
While the surveys shows high interest at the bank level, the findings also suggest many banks have been slow to adopt even the simplest of mobile banking services, such as SMS or text-based services.
As counterpoint, a few big financial institutions did announce in May new mobile-banking services: Fidelity is offering financial institutions a mobile banking and payments service including text messaging, mobile Web and downloaded applications. Plus, WaMu launched a SMS mobile banking service, following on the heels of Chase, which also offers a text-based mobile banking service. Previous posts here have tracked the growing interest in mobile banking solutions.
Reading between the lines, the move to mobile banking appears to be a classic “chicken or egg” scenario.
One camp suggests that banks are driving this move to mobile banking. An Aite research director interviewed by American Banker says that “financial institutions plan to increase their marketing of online and mobile banking services, which is why they expect the growth in adoption of online and mobile banking services. Financial institutions need to balance the addition of new services with making sure customers actually use what is offered.”
On the other side is consumer demand for more and easy-to-use mobile services. An IBM report and press release shows 60% of consumers are interested in banking via mobile devices, and their wish is to be able to personalize their mobile experiences. “Clearly the same market forces which empowered consumers to choose personal computers that were open and enabled them to customize their applications are at play in the mobile web marketplace,” said Dr. Sungyoul Lee, IBM global consulting leader, in a May 21 research-findings press release.
In the end, it looks like this will turn out to be a win-win for consumers and banks, letting consumers access their accounts when and how they want, while letting banks provide new access and convenience channels to help drive efficiencies.
What remains to be seen is how banks will integrate consumer wishes with technology solutions to “bake” mobile banking into their online services – and how or if they’ll charge you for it.
Meanwhile, get ready for an onslaught of mobile-banking advertising. Oh, you might want to make sure you have unlimited text messaging on your cell phone service.
