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Banks embrace mobile as trend picks up speed
With half of Americans using smartphones, institutions find opportunities to offer services
By Jayme Fraser : June 22, 2013 : Updated: June 24, 2013 11:45am
Photo By Eric KayneOne Frost Bank executive says as mobile usage keeps growing, branches may shift to putting more emphasis on financial advice and learning.
Photo By Eric KayneJonathan Pursch holds a phone with a Frost Bank phone app June 4, 2013 in Sugar Land, TX. (Eric Kayne/For the Chronicle)
Between December 2011 and December 2012, the number of mobile check deposits jumped 65 percent, Chase senior vice president Ravi Acharya says.
Mobile banking is rapidly shifting some customers' expectations of the total banking experience, digital strategy executives in the industry say.
"Mobile is the fastest-growing channel in the company's history," said Armin Ajami, vice president for mobile products management at Wells Fargo. "It's far surpassed online."
The ratio of Americans using mobile banking, from downloadable apps to texting services, grew from one-fifth in 2010 to one-quarter in 2011 and to one-third in 2012, according to Javelin Strategy and Research. Bank executives say that in addition to new users, more people are using multiple services.
That trend mirrors the increasing use of feature-rich smartphones.
Half of Americans now use smartphones, and just 12 percent report having no cellphone, according to a 2012 survey by the Pew Internet & American Life Project.
Marc Warshawsky, senior vice president of mobile solutions, noted Bank of America has seen growth rates among active users of mobile services rise more than 30 percent per year - a rate reported by most of the companies interviewed.
"And the engagement levels of active users are 2½ times higher than customers who don't use mobile," he said.
Ravi Acharya, senior vice president in charge of consumer digital banking for Chase, said solving customer "pain points" - that is, making daily transactions more convenient - is not just a goal of mobile tools, but increasingly an expectation from customers.
Between December 2011 and December 2012, the number of mobile check deposits increased 65 percent.
"The number of checks deposited in branches decreased at that same time," Acharya said.
He and others noted that banking habits do not seem to be converting completely to digital.
But Ajami said the customers who use mobile tend to be the most engaged. That is, they have the largest number of transactions and use the most services.
"It's really about earning the right to have that follow-up conversation and hopefully sell more products," he said.
Jimmy Stead, Frost Bank's director of digital products and services, agreed that branches will remain, though perhaps with a shifted focus.
"It's going to be less about doing a transaction and more about getting financial advice and learning," Stead said.
Stead said he envisions banking companies will one day be able to set up customers with complete mobile wallets and capitalize on phones' GPS capabilities, perhaps as another factor to refine fraud detection algorithms.
Acharya also talked excitedly about the future but warned that successful innovations take committed investments paired with thoughtfully monitored consumer trends.
"We need to walk before we run," he said. "You can't get too far ahead of your customers, or you'll end up falling behind."