Mobile banking - from added bonus to essential

By : Dan Weis

November 02, 2017 12:00 PM

Over recent years, there has been a gradual evolution in how mobile banking is perceived. It is now seen as one of the core components of the consumer banking sector, not simply something that is 'nice to have'.


One of the consequences of this, which financial institutions must be prepared for, is rising consumer expectations of the mobile banking experience. In short, any bank that wants to retain existing customers (and win new ones) amid intensifying competition in the marketplace must get its mobile services right.


'An essential component'


The mobile channel is now an essential part of the banking ecosystem. That's according to the American Bankers Association (ABA), which released a survey showing that 71 percent of Americans now use a mobile device to manage their bank account at least once a month. Exactly half of respondents said they use mobile banking more than three times a month.


Furthermore, the research underlined how standards and expectations are elevating in the mobile channel, with consumers becoming accustomed to a certain level of convenience and user experience. More than a third (35 percent) of the people polled described their primary bank's mobile app experience as excellent, while 31 percent said it was very good.


Only one percent said their mobile banking services were poor. This shows how well US banks are performing in this particular channel, but also provides a reminder that today's demanding consumers will not tolerate sub-standard services.


Nessa Feddis, ABA's senior vice president and deputy chief counsel for consumer protection and payments, provided some context on the evolution of mobile banking. She noted that mobile is primarily associated with convenience, but recent events have provided an insight into just how useful and important the channel can be.


"When branches and ATMs were closed or damaged by Hurricanes Harvey and Irma, mobile technology helped with the early stages of recovery by enabling businesses to meet payrolls and consumers to pay their bills," Ms. Feddis said. "Mobile banking has become an essential component of the banking mix, and it's something we expect to continue growing and evolving in the years ahead."



So what does the future hold?


One of the most exciting characteristics of mobile banking is its flexibility, which contributes to choice and inclusivity across the retail banking spectrum. The growth of mobile does not have to come at the expense of any other payment method or money management platform.


The ABA figures showed that nearly half (45 percent) of mobile banking consumers in the US had used a mobile device to deposit a check in the past year. This cutting-edge, tech-driven channel is providing a new lease of life for a form of payment that has been in use for hundreds of years.


We are also witnessing how mobile technology is integrating with physical banking touchpoints. Modern ATMs offer contactless access and mobile pre-staging, allowing consumers to withdraw cash by opening their smartphone app, selecting a withdrawal amount, tapping their device on the reader and entering their PIN.


With PSD2 just around the corner in Europe and open banking initiatives underway in various markets around the world, we can expect mobile to play an increasingly central role in consumers' financial affairs. Handheld devices have the potential to be the main hub through which people manage every aspect of their money, from regular tasks such as making payments and checking balances, to using third-party service providers to compare products or set long-term savings goals.


Mobile has a bright future, and banks must be ready to take full advantage of its potential in order to deliver the best and most exciting experiences to their customers.

Dan Weis

Mobile Product Leader

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Dan works at NCR leading the retail banking mobile app team. The mobile apps are used by nearly 4.8 million consumers.