Mortar to Mobile Part 3: Trends in mobile banking

Iowa Banking Law Dickinson Law Firm Des Moines, Iowa

Posted on 11/15/2013 at 10:44 AM by The Newsroom

In the second post of our series John Lande discussed the increasing number of consumers who are accessing financial services from their mobile phone or device.  In Part 3 we look at the types of financial services that are gaining popularity, the global trends that highlight potential growth, and the competitive advantage for community banks. In the early 2000s mobile banking officially launched in the United States, but it faced many challenges.  Due to limited mobile screen size and slow data processing financial information was difficult to retrieve from mobile devices.  Some large banks launched mobile services only to discontinue the service when consumer response was underwhelming.  In the mid to late 2000s as smartphones grew in popularity mobile banking gained traction.  Non-transactional services such as viewing a bank statement or finding the hours and location of a bank became more common.  A few years later advances in mobile system technologies propelled mobile banking from a text messaging and mobile web platform to transactional and application driven.  Paying bills, depositing checks, account alerts, and transferring money are modern mobile services offered by banks.    This shift in the modality of banking services in the United States over the past ten years has been dramatic but change, while undoubtedly challenging, can provide a competitive advantage for community banks.  The secret to this advantage is to treat excellence in customer service as a differentiator.  A bank’s ties to the community and its relationship to the people who walk through its doors or utilize its mobile service is a quality large banks cannot match.   Customer knowledge and personal connections coupled with mobile banking is a way for community banks to succeed in a changing technological environment.  Another advantage is the potential to reach a new demographic of consumers.  Mobile banking, although growing quickly in the United States, is nowhere near as widespread as in other parts of the world.  For this reason, there is a lot to learn from places like Africa, India, and Asia.  In these areas mobile banking is prolific and banks offering mobile services can reach a demographic of customers that they have never reached before.  The statistics are staggering in the number of unbanked or underbanked individuals who now utilize their mobile phone for financial transactions.  This demographic, although smaller in the United States, is yet another reason why banks have an economic interest in shifting from traditional brick and mortar banking to brick, mortar, AND mobile banking.

The material in this blog is not intended, nor should it be construed or relied upon, as legal advice. Please consult with an attorney if specific legal information is needed.

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