We use mobile banking to deposit cash, pay what we owe to a friend, or check our bank account, said Mary Wisniewski of Bankrate, a consumer financial services company. What makes mobile banking appealing is convenience, allowing us to conduct transactions from our phones whenever we want.
Paul McAdam, senior director of banking services at J.D. Power, noted that the features of mobile apps nowadays are comprehensive as we can transfer money within the bank, transfer cash to another financial institution, pay bills, and more. He added, “From the standpoint of monitoring and moving money, it’s so easy.”
Mobile Banking and Payments Among Financial Institutions In the Sixth District (2016)
The Federal Reserve Bank of Atlanta, one of the US’s 12 Federal Reserve Banks, surveyed financial institutions (FIs) in the Sixth Federal District— which consist of Georgia, Alabama, Florida, southern Mississippi and Louisiana, and the eastern two-thirds of Tennessee— about mobile banking and payments in 2016, reported David W. Lott.
98% of the 117 FIs said they currently or plan to offer mobile banking service. Of those who indicated they were currently offering or planning to offer a mobile banking service, 77% had their mobile banking service for over a year, up from 2014’s 59%. 12% of banks and 15% of credit unions launched their mobile banking service within the past year, suggesting that 90% of the responding FIs have an operating mobile banking service.
Banks would like to offer mobile banking service to retain existing customers, while credit unions had differing opinions over customer retention, attracting new customers, and being a technology market leader. Regarding barriers, banks cited (73%) security concerns as their top barrier to mobile banking unlike credit unions (62%), up from 2014’s 71% and 70%, respectively.
For credit unions, they cited lack of trust in the technology (77% versus bank’s 54%) as a barrier to mobile banking. Overall, 51% do not see any reason to use mobile banking (51% of banks versus 54% of credit unions) and 31% mentioned ineffective marketing by FIs (34% versus 23%). 90% of respondents did not change or planned to charge a fee for their consumer mobile banking service. However, FI’s mentioned three functions that might be subject to a fee: mobile person-to-person (P2P) (58%), mobile remote deposit capture (RDC) (42%), and mobile funds transfer between the same customer’s accounts at different FIs (25%).
When asked if the respondents would market or plan to market any mobile banking products to the underbank, 21% of banks said they plan to market within the next two years (21%), 20% answered they would market today, and 58% said no. Among credit unions, 39% planned to market in the next two years and 31% said either they would market today or not at all (31%). 12% of respondents said they had no current plans to support tablet devices for their mobile banking service, up from 2014’s 4%. In fact, 87% of FIs supported iPad for mobile banking (versus 95% in 2014), along with Android (64% versus 69%), and Kindle (22% versus 21%).
When asked about the mobile functions the respondents were currently or planning to be supported, 100% of FIs said check balances (DDA, savings) and transfer funds between the same owner’s accounts within their FI. Other functions that the FIs would currently or plan to be supported were view statements and/or transaction history (DDA, savings) (99%), bill payment (97%), mobile remote deposit capture (RDC) (92%), ATM/branch locator (84%), and mobile P2P (76%).
Mobile Banking Versus Online Banking
Mobile banking allows you to monitor your bank account and do transactions from your phone. You will be signed into an app by your bank, fintech company, or credit union to deposit checks, find nearby ATMs, and more from your phone. Mobile banking helps you accomplish financial tasks in as little time as possible. Some features organize your digital money to aid you in making better financial decisions.
Mobile banking also involves banking via SMS or logging into your bank’s mobile website, explained Discover, a website offering reward credit cards, online banking, etc. What makes it different from online banking is that the latter involves conducting financial transactions over the internet via your bank’s secure website. Your bank may also have a brick-and-mortar bank or it may be an online-only bank.
Advantages of Mobile Banking
Mobile banking apps offer good security. Yes, nothing is perfect but you can take extra measures to secure your bank account by activating the multi-factor authentication to prove that it is you who is making the transaction.
For instance, a code could be sent to your phone for money transfers that exceed a certain threshold. In order for the transfer to be successful, you would enter the code and log into the app to verify your identity. Presently, mobile devices and some banking apps allow you to scan your face or fingerprint before you can log into your bank account, adding another layer of security to ward off fraudulent actors.
App features are also becoming more advanced. For example, banks like Wells Fargo, Ally Bank, and Bank of America, let you use your app as a debit or credit card if you misplaced it or stolen. Aside from that, you can also set up notifications for low balances and travel alerts, as well as when your transactions post.
Disadvantages of Mobile Banking
However, not all mobile banking apps work well as even the best apps will experience downtimes every now and then. Navigating your way around a mobile bank account can be overwhelming. “As banks are adding more features, some consumers are being stumped. They maybe don’t know how to use it or can’t figure it out,” McAdam commented.
If you are having difficulty navigating your bank’s mobile app, consider asking if it does in-person demos. Some banks have specialists in their branches to help customers use their mobile apps. Another shortcoming of mobile banking apps is the lack of support for getting a mortgage. “A big disadvantage of mobile is you are not getting that kind of detail that you would get from an in-person interaction,” said Stephen Greer, a senior analyst focused on retail banking at Celent.
Mobile banking helps you be in control of your finances and transactions. It’s quick and convenient, but navigating your way around your bank’s app can be a daunting experience. Further, you also need to take extra steps to secure your account from malicious actors. We can glean that mobile banking usher the new age of banking now and in the future.