News Column

Increase Mobile Banking Adoption

September 3, 2013

Yes, more consumers are using mobile devices - A 2012 Federal Reserve mobile financial services study indicated that the majority of American consumers use some form of technology to interact with their financial institutions.

Yes, more customers are using mobile banking - The Fed survey found 21 percent of mobile phone owners have used mobile banking in the past 12 months; 11 percent of those not currently using mobile banking think that they will probably use it within the next 12 months.

Yes, there is cost savings for the financial institution - The average financial institution can save almost $50 annually with each customer that uses mobile over branch for a single monthly deposit, according to a recent Javelin Strategy &. Research study. For the typical institution, an in-person transaction costs S4.25 while a mobile transaction costs about 10 cents.

But how do you entice more of the bank's customers to use it? Maybe a better question is, "Why aren't bank customers using it?"

Concerns about the security of the technology was a common reason given for not using mobile banking (48 percent), the Federal Reserve survey found. Another reason: Three in five of those not using mobile banking simply felt their banking needs were already being addressed, and thus felt little motivation to add the channel.

Another key challenge for smaller institutions may be attracting the right demographics, according to Mary Monahan, executive vice president and research director, mobile, at Javelin. "The typical mobile banking customer is young (ages 18 through 44), ethnic (typically Asian, Latino or African American) and high income (earning more than $75,000)."

Or, you may be a bank in Texas. According to a 2009 SWACHA Consumer Insights Survey among Texans, respondents revealed an overwhelming hesitancy to use cell phones to conduct banking transactions. SWACHA's survey found that only 7 percent were using a mobile banking feature on their cell phones, according to an American Banker article.

No matter what the reason, it does not mean community banks cannot increase adoption of mobile banking. According to Fiserv, customer adoption lies in the hands of the frontline staff.

To learn more about mobile banking and how to increase its adoption, go to and click on this column.

Survey Says

For most financial institutions, mobile banking adoption typically hits a glass ceiling of 15 to 20 percent of online banking customers, according to Fiserv.

There is a widening gap between mobile banking adoption rates at smaller banks and credit unions compared to larger financial institutions, according to a Javelin Strategy & Research study. Only 21 percent of consumers at regional and community banks and 15 percent of consumers at credit unions use mobile banking versus 37 percent of consumers at giant banks.

The most common use of mobile banking is to check account balances or recent transactions (90 percent of mobile banking users), according to a Federal Reserve study.

Alerts are a relatively untapped means of interacting in real time with customers. Currently, two in five mobile users do not receive any alerts at all from their financial institutions, according to the 2013 ath Power Mobile Banking Study.

For more stories covering the world of technology, please see HispanicBusiness' Tech Channel

Source: Copyright Bank News 2013.

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