Benefits of Mobile Banking

Technology is driving substantial changes in the way people interact with the banking industry. According to The Consumers and Mobile Financial Services 2016, 71% of bank customers utilize online banking and 43% use mobile banking applications (1). This report illustrates the growing popularity of online and mobile banking, and it also serves to indicate overall consumer trust of online transactions.

A report from Javelin Strategy & Research in July 2013 discovered that financial institutions could have substantial savings by utilizing mobile banking. According to Javelin Strategy & Research, the average cost of a mobile deposit is 10 cents, while the same transaction costs $4.25 when processed in a branch (2). Annually, this averages to a savings of approximately $50 per mobile-banking customer, which equals a potential savings of $1.5 billion for the entire banking industry.

Looking at the numbers, advances in mobile banking present benefits for financial institutions and consumers. According to Rob Van Nevel, “Mobile services also set the stage for deeper, more meaningful member relationships. Branch employees’ time is freed up from transactions which means more time can be spent consulting with members, addressing needs and delivering financial education” (3). An increase in mobile banking means that consumers receive better service when they do visit their branch, and financial institutions are able to provide enhanced availability, competence and efficiency.

As popularity and consumer comfort increases, mobile banking can also become a great equalizer for banks and credit unions with few branch locations. The ability to make deposits and manage accounts from a mobile device reduces the frequency with which a customer needs to visit his or her bank branch. Consumers also benefit financially through the speed and ease of mobile deposits. Many consumers often hold checks for days or even weeks before depositing due to lack of time, the inconvenience, and other various reasons. Depositing right away through a mobile device means that your money can start earning interest sooner.

What are customers’ main reasons for not using mobile banking? Concerns about technology security tops the list. However, utilizing mobile banking puts the consumer at no more risk for fraud or compromise than say, online shopping. And in fact, mobile banking helps monitor transactions so efficiently that it is much easier to identify and remedy unauthorized purchases. Additionally, the user-interface for online banking applications are simple and easy to use. Applications are well maintained and companies keep up-to-date with upgrades to provide consumers with safe, efficient ways to bank.

Sources

1.Board of Governors of the Federal Reserve System,
https://www.federalreserve.gov/econresdata/consumers-and-mobile-financial-services-report-201603.pdf
2.Javelin Strategy & Research,
https://www.javelinstrategy.com/press-release/javelin-identifies-15-b-mobile-banking-cost-savings-leveraging-omnichannel-approach
3.Credit Union Times,
https://cutimes.com/2013/08/07/go-mobile-the-right-way-guest-opinion