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Mobile banking continues to dominate banks' application-development initiatives, as it has for the past several years.
The results of a recently released survey suggest that 42% of banks offer mobile banking or mobile payments. And among those that don't, 40% have firm plans to offer them within the next 12 months, according to the poll of 303 senior bank managers in the Executive Forum of American Banker, a PaymentsSource sister publication.
The survey was conducted in partnership with TSYS, Tata Consultancy Services and Jack Henry Associates.
Among the largest banks polled, 76% offered mobile banking. And 54% of those that did not planned to introduce mobile banking in the next year. Most, 91%, of the participating banks’ apps were geared toward consumers.
Customers who expect mobile access to their bank and who easily could take their accounts elsewhere if their bank fails to deliver are forcing institutions to offer mobile services. The return on investment for banks has been less clear. Although a mobile-banking session is far cheaper than a branch transaction, the opportunities for relationship-building and cross-selling are fewer.
What banks most hope to get out of their mobile-banking application-development projects are deeper customer relationships, the survey data show. Eighty-seven percent of respondents said they hoped strengthening customer ties would drive the development of mobile-banking apps at their institution. Competitive pressure was cited by 71%. Surprisingly, only 55% said moving transactions to lower-cost channels was a driver, and 53% cited new-relationship acquisition.
What's holding back the non-adopters? Security is the top concern, cited by 77% as the most significant barrier to the growth of mobile banking. Almost half, 49%, said cost was an issue. Less than half, 44%, were worried about the demand for and value of mobile-banking apps. Less than a quarter, 24%, felt that poor functionality was a barrier to mobile banking adoption, and only 20% said awareness was an issue.
Asked what types of mobile-banking apps are most important for a bank to offer, 77% said information reporting (letting customers check balances and transactions on their mobile device). Most, 73%, considered text alerts highly important, 64% had a high regard for mobile funds transfers, and 58% put a high value on the ability to set up recurring bill payments by phone.
Next on the list are two newer capabilities: remote check deposit, cited by 55% of respondents, and person to person payments, 46%.
New and upcoming app features on the list give insight into what mobile banking programs of the future might look like: 28% of the participating banks said the ability to fund debit and prepaid card accounts by mobile device was highly important, and 27% were highly interested in mobile-wallet apps such as Google Wallet.
This percentage might seem low, but it indicates a strong interest relative to the fact that such applications are not commonly available yet.
A quarter, 25%, thought personal financial-management tools on mobile devices were very important. Location-based merchant offers or coupons such as Bank of America's online and mobile coupon delivery plan with Cardlytics were of high interest to 20% of the bankers surveyed. Contactless payments, at 17% of respondents, and loyalty rewards programs at 15% also were of interest to this group, which shows there's plenty of room for new payment and rewards programs to be delivered by mobile device.
The American Banker Executive Forum is a community of senior banking and payments executives who have made a commitment to regularly share their opinions and insights with the editorial and research groups at American Banker. American Banker Research is a business of American Banker, a SourceMedia brand.
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