Immobile mobile banking: Stuck in the mud

How many of your members do most of their banking via a mobile app?

How many should?

Milestones to remember before answering:

  • iPhone introduced June 2007
  • SMS banking via phone debuted in Europe 1999
  • Mobile banking smartphone apps take off in 2010

We are 20 years into the banking by mobile revolution and 10 years into the banking by smart app revolution so tell me this: why do roughly half of us not use a mobile banking app, according to a 2018 Harland Clarke report.

About half plain never use the thing.  Never.

The document elaborated: “Only about a third of respondents are using a mobile banking app on a phone or tablet with some regularity — a minimum of three times a month. This means, despite the fact that 77 percent of Americans now have a smartphone, two-thirds are not using mobile banking at all or are only using it a few times a year.”

Talk about a failure on the part of bankers and credit union executives.

This is an era where ever more of us meditate via smartphone, we interact with “personal” trainers via smartphone, we do email on the device, we keep our calendars on the phone, we even read books and watch movies on phones.

That anemic mobile banking take-up is despite the obvious fact that smartphone access has an enormous advantage for consumers, namely, easy biometric login (fingerprints for most of us). Don’t ask me the password for my primary credit union account or my mega bank account. I do not know them off hand and that’s because I adopted long, random passwords but I mainly sign in with a fingerprint on a smartphone.

The other consumer advantage of course is the mobility of information itself.  A consumer standing in the checkout line does not have to guess her/his checking balance. A few clicks and there’s knowledge. That ubiquity of information is a revolution that helps empower every consumer to be smarter in her/his financial decisions.

For the financial institutions, too, there’s a plus: vastly lower costs.  Case in point per Harland and Clarke: “Mobile deposit is worth your effort. For financial institutions, the savings are huge — mobile deposit costs financial institutions just $0.08 per transaction, versus $.80 at an ATM and $8 via teller.”

Those cost savings are across the board. Digital access just is a lot cheaper for the institution than is analog, in person access.

Here’s the money question: why don’t more of us do more of our banking on a mobile device?

A report by Extractable entitled Digital Experiences in Banking 2019 offers a clue: “In an era of digital self-service, 50 percent of the top 20 banks don’t offer an option to open an account online, and several lack a mobile optimized site.”

Those are stunning shortcomings.

Why can’t consumers open a new account on a mobile device? There is no good excuse for the lack.  Just as there is no good excuse for the lack of mobile optimized sites.

Financial institution digital access simply is not keeping up with broad advances elsewhere in the digital world.

And you wonder why growing numbers of Millennials and Gen Z migrate to non banks.

The non banks, in most cases, are mobile first fintechs that are created to capitalize on the plusses of mobile access. They are good at precisely what traditional financial institutions are not and digital, increasingly, appears to be a top priority, especially for consumers under, say, 35.

They are the future of any financial institution.  The fintechs are wooing and winning them.

More bad news is that despite having access to mountains of consumer data, financial institutions simply cannot personalize mobile banking. Said Extractable, “94% of banks surveyed in the recent Digital Banking Report say that they can currently only deliver basic levels or no personalization at all.”

Call that a huge fail, especially this many years into the mobile transformation.

Question: is your institution’s mobile banking product yours? Or is it a vendor’s with essentially no customization, for your institution or your members? It’s an embarrassing question to answer a decade into this.

Especially because the truthful answer is that the vast majority of credit unions offer no meaningful institutional customization.  The credit union down the block offers the exact same mobile banking experience and they both are blah, both fail on member personalization too.

Credit unions today have two obvious lines of attack.  They need to focus on really upping mobile usage by members.  And they need to find ways to create more personalized, compelling digital experiences.

Time is shortening. The time to act is now.

Robert McGarvey

Robert McGarvey

A blogger and speaker, Robert McGarvey is a longtime journalist who has covered credit unions extensively, notably for Credit Union Times as well as the New York Times and TheStreet, ... Web: Details

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