LOMBARD, Ill.—A new report indicates that offering mobile banking is now table stakes, and to keep consumers—particularly Millennials—happy and in the fold financial institutions now must offer advanced mobile capabilities.
Writing for The Raddon Report, Pat Bator, Raddon senior research analyst, emphasized that financial institutions must know the mobile services the account base values and uses, and do their best to deliver them.
Bator called the current era of mobile, “Mobile Banking 2.0,” moving beyond Mobile Banking 1.0, in which consumers used the service primarily to check balances.
The second generation of mobile banking is evolving more quickly than Bator said he can imagine. Citing that 84% of FIs that now offer some form mobile banking, Bator said, “Today, community-based mobile banking providers are testing and experimenting with location-based services that send consumers discounts and offers from local merchants as they walk or drive by a specific site. Further, firms are taking a modern approach to responsive web design, developing a site so screens will render according to the device accessing the site. And who can suggest how the payments market will advance with the advent of Apple Pay? Mobile banking 3.0 will likely be at the industry’s doorstep faster than one expects.”
That means mobile banking providers need to be very nimble, said Bator. “Raddon’s National Consumer Research shows the Gen Y segment is more likely—‘extremely to very likely’—than the general public to use a wide variety of mobile services, from booking an online appointment or using a cardless ATM service to making a mobile deposit or using mobile bill pay,” Bator said.
As previous studies have indicated, and the current Raddon Research backs, Millennials are significantly more likely than the general public to cite mobile banking as a reason they value doing business with their primary financial institution. Raddon’s study shows 64% of Millennials identified mobile banking as an “extremely to very important” reason they would select a primary financial institution to conduct their business.
“They are also significantly more likely to indicate they might move their primary business to another financial institution if conditions change with their current mobile banking service,” said Bator. “Although consumers in general are not quite ready to suggest they would end their current banking relationships for better, more advanced mobile services, the research indicates a crack in the dam—mobile delivery could soon disrupt existing banking relationships, especially among younger consumers."