I confess, I love my mobile banking apps. In fact, I love banking by phone, as I’ve come to think of it, so much that when a rival bank first introduced mobile checking deposits, I considered switching.
I, too, wanted to be able to deposit checks without ever leaving my home. Who wouldn’t want that ability? Fortunately, my bank introduced mobile checking soon after. I love it. It saves the bank money. It saves me time.
I should note that I’m an early adapter (although friends call me a geek). I was one of the first in my dorm to try ATMs. I was banking online when people still thought of it as exotic and somewhat dangerous (I figured if the banks had my information online, I should have access to it as well.) So as soon as my bank offered an app, I jumped.
I may have been one of the daring firsts, but I’m far from the last.
Mobile is here. Get used to it. That’s what a number of experts are telling financial institutions: Make sure you offer mobile solutions, or become obsolete.
“Financial institutions are faced with two choices: Bury their heads in the sand and lose business to mobile-first entrants or embrace the opportunity… and proactively build top quality apps,” states a recent white paper by Apteligent, a San Francisco-based mobile app performance-monitoring firm.
Of course, Apteligent is in the business of mobile apps, so it’s likely to see things that way.
But you can’t argue with numbers:
- Some 87 percent of U.S. adults have mobile phones and 71 percent of those are smartphones, according to a Federal Reserve report, Consumers and Mobile Financial Services 2015. That’s a lot of power in pockets and purses.
- Further, 39 percent of all mobile phone owners with a bank account, had used mobile banking to access that account. That’s up from 33 percent in 2013 and 29 percent in 2012.
- The numbers were even higher for those who owned smartphones (as opposed to flip-type phones). Some 52 percent of smartphone owners with a bank account had used mobile banking.
If a large government agency is noticing the trend, that means something.
So you’d think banks are clamoring to get their own apps.
In fact, more than three-quarters of banks already have them, according to an online survey Apteligent conducted in December.
But while usage is high – banks with an app said half of their customers use it at least once a week and more than a quarter of them were using it daily – some 47 percent of the banks that Apteligent surveyed said mobile banking accounted for less than a quarter of their revenue.
Only time will tell, of course, but several analysts and experts are confident that apps will continue to grow.
Why? Look at the millennials, who are the future, after all.
Those reared in front of tablets and computer screens are expecting financial services to deliver banking to their pockets.
Millennials’ “relationship with the financial system is very different — it’s an electronic one, on their smartphones,” Mark Zandi, chief economist at Moody’s Analytics told the New York Times. “That can and will be very disruptive to the banking system.”
Speaking more broadly, banks are scrambling to offer more technology and services “including peer-to-peer payments, so startups don’t steal parts of their business,” Bank of America Corp. Chief Executive Officer Brian Moynihan said, according to a story by Bloomberg.
In fact, venture capitalists gave $13.8 billion to “fintech” startups in 2015, more than doubling the 2014 amount of $6.7 billion, according to a report by KPMG and CBInsights.
They’re obviously betting on mobile.
“We are redefining what a checking account means in the U.S. right now,” Moynihan said, according to Bloomberg. “All of these capabilities—real-time payments, P2P, and all that stuff, this is just going to become core to what the checking account is in the future.”
Citigroup, for one, is taking the move to mobile pretty seriously. In October it set up a special unit called Citi FinTech, several media outlets reported.
In November 2015, Apteligent conducted a separate global research study of the general public. It found that 38.7 percent of people “might” change banks if they discovered one with a mobile app or better mobile app, while 8.9 percent emphatically said they would change banks.
With the exception of my aunt Betty, who loves chatting with the tellers, I can’t think of anyone else who would prefer standing in line at an ATM or a teller line to do their banking.
And apparently, I’m not alone.