There’s absolutely no question that the future of banking lies in mobile innovation. But, how do mobile banking services play in for the general population? Let’s explore how people have used bank services through mobile devices in the past year, what this information says about the future of the banking industry and what it means for the consumer.
The United States Federal Reserve defines mobile banking as “using a mobile device to access your bank account, credit card account or other financial account.” Basically, mobile banking can be done by accessing a bank’s web page through a mobile device or through a downloadable application on your phone.
Many people have called mobile banking simple, efficient and convenient. In fact, many people have already adopted mobile banking. According to recent data, about 21% of mobile device users say they have used mobile banking in the past year. The numbers from this 2012 study have since dramatically increased since then.
Mobile Banking, Traditional Banks and the Consumer
A Forrester Research report also sheds light on the usage of mobile banking, which may explain why it’s become so popular in the past few years. The study mapped out data from 2012 until today, and has projected an astounding increase of mobile banking usage to reach about 108 million users. This means that mobile banking usage has seen a positive correlation with the availability of mobile devices to the masses as well as the need of consumers to have access to easy to-use account management.
In layman’s terms, the more people companies make mobile devices for, the more access people will have to mobile banking.
What does this information mean to banks? This rising trend in mobile banking is urging financial institutions to evolve from traditional banking to a much more convenient way of managing accounts.
What does this mean for customers? In the next few years, consumers will see a vast increase of banks transitioning to mobile banking, which includes credit unions and private banks. This also means that banks will be competing for customers in the mobile sector.
Not only is it reasonable to try out mobile banking, but it’s also a great time investment. No longer will customers wait long lines or drive all the way to a bank location to manage funds. Mobile banking has definitely proved to be the future of banking.
Mobile banking isn’t the only mobile innovation in the banking sector. Now, app developers and some banks are making it easier for consumers to manage not only accounts online, but payments as well. The Discover Bank mobile app gives mobile banking a whole new meaning by allowing account transfers and photo deposits. Yes, you simply take a picture of a check or money order and the app confirms your deposit.
To elaborate, mobile payments are defined as purchases, bill payments, person to person transfers and charitable donations through your mobile phone. Much like mobile banking, mobile payments can be made easily through web pages on mobile browsers and through mobile banking apps. This form of account management makes it exceptionally easy to pay things like phone bills, credit card bills or even airfare, all paid remotely through your mobile device!
Although the numbers for mobile payment were not as high as mobile banking users (with only 12% of bank customers using this service in 2012), it has still seen a steady increase in users. Data also shows that many of those who used mobile payments were relatively younger than mobile bankers (ages 18-29).
Correlation of Mobile Payments Data
Out of the people that actually used mobile payments, most of them performed only a narrow set of transactions. Specifically, bill payments and person to person to transfers, which means that the future of mobile payment could very well become simpler and narrower. This would give users no more than three options for conducting mobile payments.
Because these numbers are not as high as mobile banking users, many financial institutions have yet to set up mobile payments for their services. Nevertheless, given the correlation between age groups and positive responses reported for mobile payments, it can be inferred that banks focusing on younger demographics will likely develop mobile payment options.
The easiness of mobile banking is becoming more and more appealing to younger consumers, who value simplicity and efficiency above all else.
The Bottom Line
The bottom line is this: traditional banking system is a thing of the past. New customers, relatively younger consumers, are looking to have a simpler and easier experience when it comes to mobile banking and payments. The numbers don’t lie: mobile is the future of the banking industry.
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