Checking Your Accounts On-The-Go: The Rise in Mobile Banking
The rising popularity of mobile phone applications, the abundance of Smartphones and greater familiarity with text messaging are all factors driving the impressive growth in mobile banking services. Having experienced phenomenal growth outside the US, it seems as with many mobile technology offerings the US is now rapidly catching on. According to research from the Towers Group in 2007 there were 400,000 mobile banking users in the US, rising to around 3.1 million in 2008. They forecasted the number to double in 2009 to 7 million. And as many small banks jump on the bandwagon, growth seems be on the up for the foreseeable future.
The figures above certainly seem to suggest its big business for banks, at a time when arguably they need it. In fact, a great article from BankInfoSecurity.com showcased data in 2009 from Bank of America (who at the time had 2 million mobile banking users) demonstrating that mobile channels was responsible for driving new business to the bank with 8-10% of mobile bankers, almost 200,000 people, having signed up within 90 days of opening a bank account with them.
Benefits of Mobile Banking
As shown in the recent Chase commercial, accessing your banking information is easier than ever before, in fact if you so wish you can check your account balances while hanging off a cliff! So with this growth in mobile banking, what is actually available through your banks and how secure is it?
Looking at the big three banks, Citi, Bank of America and Chase, their offerings are pretty much standard across the board. Each bank offers the ability to access accounts via your phone, pay bills, transfers funds between accounts, find nearby branches and atms, and manage credit cards. ChaseMobile seems to be a little more advanced in that you can manage your mortgage, home equity and auto accounts. In terms of technology, each offers the service through a wide range of devices aside from the standard iPhones and Smartphones. In fact, Citi actually has its own app for the iPhone.
A recent article in Reuters cited the fact that customer’s liked that they could use mobile banking for payments, treating their phones as “mobile wallets.” This is definitely a trend which commentators see moving up a gear in 2010 as banks vie to control this part of the market.
How Secure is it?
Security is obviously a big question for customers, who use these services. Just like many had their doubts when online banking took off, they need to know that their personal data is safe and secure. Most banks have in place a number of different security systems to ensure their customer data is secure, including using SSL encryption technology which safeguards internet traffic for secure Web applications and protects customer information as it travels from their phones to the bank. Also as with online banking, all account information is password protected so if someone was to lose their phone, their accounts cannot be accessed unless they have the correct information.
What Next for the Industry?
The growth in mobile banking over the past 3 years has been significant, so what can we expect in the future? Well additional data from Tower’s Group suggests that by 2013 we will reach a staggering 53 million people as active mobile bankers, an annual growth rate of 50%. Further in-depth research from Informa predicts an even more optimistic picture for mobile banking. Here is the scenario of mobile banking predicted for the year 2013:
- Number of estimated transactions : 300 billion
- Value of transactions estimated : $860 billion
- Number of mobile subscribers accessing banking on mobile : 977 million
- Value of domestic transactions for personal funds : $157 billion
- Value of international transactions : $48 billion
Looks like it’s a bright future ahead for mobile banking industry and it will be interesting to see how it will affect the traditional face to face aspect of banking.
That’s our Financial Services Practice Group’s “Two Cents” – have we interested you to sign up for mobile banking? How do you think the growth of mobile banking is going to affect the industry?
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