More than 75 million American consumers use their smartphones for mobile banking. National banks are leading the way with mobile banking because consumers who want digital banking believe big banks have better mobile banking solutions. 80% of users report using mobile deposits AT LEAST once a month. FindABetterBank.com reports that young comsumers are more likely to select a national bank over a community bank or credit union, most likely because their grip on digital channels allows them to expand into new markets without large investments in new branches. In the last year, mobile peer to peer (P2P) payments grew over 30%. On a recent survey by FindABetterBank.com, 36% of shoppers state that mobile banking is a requirement when finding their new checking account. People under 30 looking for banks, are more than twice as likely to require mobile banking. This causes a problem for smaller institutions, as only 17% of people actively shopping for checking accounts are over 50 years old. With mobile remote deposits emerging as a popular banking service (more than 1/8 of Americans deposited a check using a mobile device in the past year according to the ABA), its rate of use is rapidly increasing. “Mobile apps present a tremendous opportunity for financial institutions to increase loyalty and add value,” says David Vonk (leads North American banking practice at FICO). With mobile banking on the rise, user confidence stands with national banks.
Will credit unions and community banks be able to prefect their mobile apps in time to keep their customers? Smaller institutions excel in customer service and personalization, but will this be enough to appease their customers? Both consumers and small businesses are using many technological techniques every day – from email, to browsing the web, tracking their spending habits online has become vital for many, but as money transfers begin to take precedence – credit unions and community banks must step up their mobile based technology and innovation in order to remain relevant.
In order to stay competitive with their larger counterparts, credit unions and community, smaller institutions should begin by analyzing their customer’s technology usage and preferences. Every customer (broadly speaking: consumer vs business) are greatly different in needs. While Millennials (63% of the mobile banking market) may not be the biggest customers today, their technology habits will greatly effect how they apply for loans, spend money in college, and even pay for their bills. Business customers themselves often relate to their customers through technology. A small business with your institution may relate to their customers solely through mobile devices, or allow them to track their business online.
Analyzing your customers is not enough. Smaller Banks and Credit Unions must understand their current technology. If there is currently an online banking program available – is is exclusively available on a desktop? Or is a mobile counterpart available? The MSR Group found that consumer satisfaction for mobile banking is roughly 10% less than its tradition online counterpart, requiring the effort to prefect mobile banking that much more critical. How easy is it for you customers to access their checking account via phone? Are text message updates available when checking is low or to confirm a transaction? How can the individual specify their preferences?
After understanding the plan of action, begin implementing it in phases. Since ever mobile-based technology access to the institution’s services will require separate integration efforts; plan for it accordingly.
With new, tech-based companies encroaching on the banking space by offering a wide range of easy-to-use services (Square, Kabbage, Moven etc) it is vital for Credit Union and Community Banks to step up their online and mobile presence in banking – to not only please their customers, but to retain them. It is clear that moving forward in this industry, there will be a strong correlation between customer’s satisfaction with mobile banking and their overall satisfaction. The biggest question that remains is when will there be no difference between the two?
Check Back Next Week for the Highest-Rated Apps for Banks and Credit Unions & The Pros and Cons of Mobile Banking to Watch (especially when integrating mobile banking in your institution)