Robert Meara, a senior analyst at financial research and consulting firm Celent, believes that financial institutions should realize it's the mobile way or the highway.
"The world is quickly going mobile, and if banks aren't there already, they're way behind," Meara told The Wall Street Journal.
Mobile banking services and applications are quickly turning into sought-after features from banking customers. With banks vying for position, hoping to nab quarterly revenue and profit growth, mobile banking has surfaced as one of the chief tools to attract and retain customers.
"It's the fastest-growing portion of the consumer business," Timothy Sloan, chief financial officer of Wells Fargo, told The Wall Street Journal. At Sloan's firm, two out of five customers with bank accounts are active users of its mobile-banking service. The majority of its users mostly deposit checks, check balances and transfer funds between accounts.
Most importantly, mobile banking apps offer financial institutions a way to cut costs. The average cost to a lender for a mobile transaction is a mere 10 cents, or about half the cost of desktop-computer transaction, according to Javelin Strategy & Research. Javelin stated the cost of the average ATM transaction is $1.25, and the more people that use mobile banking, the less branches have to be staffed.
Despite the growing popularity of these applications, are enough consumers fully aware of their mobile banking possibilities? It's a mixed bag.
Banks need to market mobile apps
While some financial institutions are putting their mobile applications on the forefront of their marketing strategies, others are failing to capitalize on the growing demand.
According to a recent survey from BuzzCity, a mobile advertising network, some consumers are oblivious of the capabilities offered by their banking app, unaware of their ability to conduct transactions via their smartphones and tablets.
BuzzCity surveyed 6,000 consumers across 20 countries and discovered that 26 percent of respondents were unaware if their bank provided any type of mobile service. Additionally, 29 percent stated they do not think their bank offered such features.
This is surprising because most customers prefer to do their banking from remote locations rather than spending time in a branch.
"There are few things more inconvenient to banking consumers than carrying a check around and waiting to come to a branch or ATM," Meara said.
But the confusion regarding mobile banking doesn't stop there for many respondents of the BuzzCity survey. Of those who knew their bank offered such services, nearly one of three stated they were unaware of what type of transactions they can conduct over their mobile phone, and 31 percent said they were sure they could not conduct banking transactions while on the go with their mobile devices.
This shows that many financial institutions are behind in the times and must promote the features offered by their mobile applications.
According to Bob Graham, senior vice president of banking and financial services at Virtusa, mobile banking is still in the early stages of its life.
"We have only begun to tap into the possibilities of mobiles devices with camera, geo location and social awareness capabilities," Graham told Bank Systems and Technology. "Mobile check deposit was the first truly device unique capability, or so called 'image banking'. 2014 will be the year of photo bill pay."
Consumers willing to go elsewhere
The Wall Street Journal reported that when banks aren't up to snuff with their banking applications, consumers are quick to cut ties and look elsewhere.
Approximately 60 percent of smartphone and tablet users who switched banks in the fourth quarter of 2013 said mobile banking was a significant deciding factor. That's up 53 percent from the second quarter of 2010, according to New York-based consulting firm AlixPartners.
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