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Increasing Mobile Banking Adoption

By: Kari English

Yes, more consumers are using mobile devices — A 2012 Federal Reserve mobile financial services study indicated that the majority of American consumers use some form of technology to interact with their financial institutions.

Yes, more customers are using mobile banking — The Fed survey found 21 percent of mobile phone owners have used mobile banking in the past 12 months; 11 percent of those not currently using mobile banking think that they will probably use it within the next 12 months.

Yes, there is cost savings for the financial institution — The average financial institution can save almost $50 annually with each customer that uses mobile over branch for a single monthly deposit, according to a recent Javelin Strategy & Research study. For the typical institution, an in-person transaction costs $4.25 while a mobile transaction costs about 10 cents.

But how do you entice more of the bank’s customers to use it? Maybe a better question is, “Why aren’t bank customers using it?”

Concerns about the security of the technology was a common reason given for not using mobile banking (48 percent), the Federal Reserve survey found. Another reason: Three in five of those not using mobile banking simply felt their banking needs were already being addressed, and thus felt little motivation to add the channel.

Another key challenge for smaller institutions may be attracting the right demographics, according to Mary Monahan, executive vice president and research director, mobile, at Javelin. “The typical mobile banking customer is young (ages 18 through 44), ethnic (typically Asian, Latino or African American) and high income (earning more than $75,000).”

Or, you may be a bank in Texas. According to a 2009 SWACHA Consumer Insights Survey among Texans, respondents revealed an overwhelming hesitancy to use cell phones to conduct banking transactions. SWACHA’s survey found that only 7 percent were using a mobile banking feature on their cell phones, according to an American Banker article.

No matter what the reason, it does not mean community banks cannot increase adoption of mobile banking. According to Fiserv, customer adoption lies in the hands of the frontline staff.

To learn more about mobile banking and ideas on how to increase its adoption, click the link below.

Mobile Banking Adoption

Kari English is senior editor of BankNews.