Mobile banking is an evolving landscape that has shifted noticeably in the last several years. It is continuously impacted by changing consumer preference and behavior, differing approaches and solutions offered by industry players, and emerging innovations in its underlying technology.
Two years ago, mobile banking was — in many respects — still in its infancy. Mobile deposit was a new technology that was relatively untested. Mobile payments were still in the early development stage and not widely available as a feature of mobile banking. Very few financial institutions treated the mobile channel as a primary way to engage their members, instead considering it an extension of online banking.
Consumer use cases and pricing models for the newest features of mobile banking — mobile payments, mobile deposit, and others — were not yet fully understood. Generally, there were strong indications that mobile banking was becoming a significant technology for financial institutions, but it was unclear what the ultimate impact would be on traditional banking models.
From a technology perspective, wireless application protocol (WAP) and SMS functionality were both seen as necessary components of a mobile channel that included native apps — usually called the mobile banking “triple play.” Smartphones were growing in popularity, but they had not yet come to dominate the market for mobile devices. Blackberry appeared capable of returning to a reasonable level of market share, even though by that point its decline was well underway. Tablets were new to the industry and were seen by different groups as a game-changer, a fad, a PC replacement, or even the natural continuation of what had already begun with the iPhone years before.
From the perspective of the financial institution executive who was trying to understand and address how to enter the mobile channel, considerable uncertainty surrounded both what consumers actually wanted and what options were available for delivering a product that addressed that need. Would consumers adopt mobile banking en masse or would it be specific to a particular demographic or income bracket? Would mobile banking replace online banking or supplement it? What platforms, operating systems, and devices were going to survive and how many would need to be supported? Were WAP versions of existing online banking services sufficient or were native apps specific to each operating system required? And, most importantly, what was the business case for the financial institution itself (i.e., cost savings, revenue generation, competitive necessity)?
Today, much of the mobile environment has changed.
On average, consumers now spend 37% of their Internet-connected time on their smartphones rather than their PC. This trend has affected- and will continue to affect- how consumers engage with their financial services providers.
Android and iOS dominate smartphone operating systems now more than ever, apps have clearly beat-out WAP as the preferred way of delivering content and services, and tablets have exploded in popularity since their launch — though we know they appeal to a different demographic than smartphones. There is also sufficient data around consumer use that proves mobile banking to be a fundamental service that financial institutions need to provide. However, the basic question of “what do we do now?” still persists.
A new whitepaper from Bluepoint Solutions identifies several key trends that are collectively changing the mobile banking landscape, including:
The ubiquity of mobile banking among the key financial institutions in the country
The readiness with which consumers have adopted banking on smartphones, coupled with the growing dominance of smartphones in the mobile phone market
A transition in how consumers access the Internet — moving away from the PC and towards mobile — as well as the market dominance of Android
The emergence of tablets as a distinct subset of mobile devices
A growing awareness on the part of consumers about the differences in and importance of a rich and refined user experience
These five are among the many trends that are disrupting traditional models of financial services and positioning mobile banking as a key driver behind new business models, particularly in the self-service channel.
Click here to pre-order the full white paper, scheduled for publication in May 2013.
Bluepoint Solutions is a financial technology software company focused on providing payments and content management solutions to credit unions. As an established leader in the credit union industry, Bluepoint offers three main product categories: check capture, item processing, and content management. As one of the few providers in the industry to offer a viable end-to-end check capture and item processing solution, we continue to develop new payments solutions for our expanding customer base.