Banks feel urgent need in mobile banking

Bankers at a panel on mobile banking at Celent's Innovation and Insight Day came to consensus recognizing mobile banking as necessary condition for banks.

The discussion was moderated by senior analyst Jacob Jegher. There were three bankers and one alternative financial services provider as participants. All agreed that mobile is where the business is going. 

As Andy Arshad, mobile channel manager with USAA, said, mobile banking is not hype—it's needed for serving customers. USAA’s customer base is unique and “mobile” in the ordinary sense. It consists of military personnel and their families. The company launched mobile banking one year ago. "We are seeing great growth in mobile banking," Arshad told attendees. "We have a 12 percent adoption rate with one million unique users. Our mobile activity is double what it was seven months ago."

Bank of America has got 2.5 million m-banking customers. It has had to do a bit more work for conveying the value of m-banking to its customers. First adopters were, as expected, young and more tech savvy customers. However, as Douglas Brown, mobile product executive with BofA, said, the distribution of mobile banking use among the bank's customers is evening out across demographics. "It's incumbent on the industry to move to mobile," he asserted. "Our customers are moving to lower cost channels. The immediate access and control of one's finances resonates well in today's economy."

Many people compare mobile banking to online banking. The difference between them is the pace of evolution, as noted BofA’s Brown. Mobile banking is moving much faster than online banking ever did. And this faster pace of mobile banking presents banks with an almost do or die option. Carl Snyder, president, Zions Internet Bank, added "Banks need to adopt mobile more quickly. If they wait, they'll be left behind." 

As Snyder noted there might already be advantages around security for mobile phones in customers' eyes. "Some people feel more secure on their mobile phones than on their PCs because of all the viruses and malware that can infect computers," he commented. Additionally, as noted BofA’s Brown, the mobile phone is location-sensitive. This is another security advantage of mobile banking. 

The mobile channel gives institutions access to information they never before had, such as who the person is, where they are and the kinds of transactions they're performing. "It's a powerful tool for the consumer and the bank."