Mobile Banking is Set to Skyrocket

While an estimated 90% of U.S. consumers use mobile phones, far fewer use them for banking. In fact, a Gartner report released in June said that out of the group studied, only 15% had used mobile banking in the past month.

This adoption rate might seem small compared to the overall use of smartphones and other mobile devices and in light of the buzz the channel has generated. However, industry participants say the potential is there.

“The movement of data by mobile device is doing very well, and that’s not due to financial institutions right now,” said Red Gillen, a senior analyst with Celent in Boston. “People just love their mobile devices, and in fact, the transmission of information now exceeds the transmission of voice in the United States.”

Industry participants say mobile banking is now what online banking was a decade ago as it transitioned from static “brochureware” to essential functionality.

And some argue that, like online banking, mobile banking soon might not be much of a choice for any credit union that wants to be its membership’s primary financial institution.

“Get it on your radar,” said Ryan Hickman, new media specialist at $359 million Sunmark Federal Credit Union in Latham, N.Y. “Beyond a service, mobile banking offers product marketing opportunities [and] research into where your members are so if you were to create new ATMs or branches, you have data to back up your implementation.

“Really, it’s what online banking was 10 years ago, becoming a major decision variable in where to bank. And it will become what online banking is today—a total necessity for new member acquisition.”

From core processors to payments specialists and in-house developers, technology providers are responding to the credit union demand by cranking out new platforms or integrating third-party offerings.

“We’re getting lots of pressure from our customers, who are getting pressure from their members,” said Kevin Kolar, a vice president at Bradford-Scott Data Corp., an Indiana-based provider of core processing and related solutions to about 170 credit unions. “They’re telling us that if we don’t offer this, their younger members are going to find someone who does.”


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