2011 marks the first year that more people will buy smart phones instead of traditional mobile phones.
Widespread usage of smart phones is causing a fundamental shift in how credit unions communicate to, connect with, and engage members. Facebook, Twitter, Google, and iTunes, just to name a few, continue to fuel the innovation and evolution of mobile technology.
Your members, arguably, rely on at least one of these applications, if not several, to conduct much of their day-to-day activities. And now, Android, once thought of as a byproduct of the smart phone world, is now perhaps the single, biggest force for continued growth of the smart phone industry.
Despite overwhelming data demonstrating the increased reliance and adoption of mobile technology, a large portion of the credit union industry is slow to, in some cases even wary, to embrace this new reality. In 2007, 5% of consumers used their mobile device for banking. That has now increased to 19% according to Javelin Research. By 2015, it is expected to reach 41%. The early adopters in financial services have made their move and proven the viability of mobile banking. It is time for the rest of the credit unions to follow suit. If they don't, they risk losing relevance, and losing members.
According to Callahan and Associates, less than half of credit unions with more than $1 billion in assets offer mobile banking. One-third of credit unions with assets between $500 million and $1 billion offer this service. The majority of credit unions are missing a unique opportunity to strengthen member loyalty, build brand equity, and grow their business.
According to Nielson, mobile banking consumers typically have a higher net worth, and carry higher account balances when compared to users of online and traditional banking methods. The report also demonstrates that 20% of mobile banking users are younger than 24 years old. Mobility matters to this group of individuals, and it will be nearly impossible for credit unions to retain and/or attract this market segment without a strong mobile strategy. And the report further validates that mobility matters to these individuals more than most.
Higher net worth individuals travel more for both work and leisure. Being able to access funds, conduct financial transactions, and monitor their accounts are all important-sometimes vital-capabilities to have from any location. The younger age group is equally mobile-think college kids-and, for better or worse, displays an almost epidemic addiction to their mobile phones. They have grown up meeting people, chatting with friends, sharing photos, playing games, listening to music, and sharing their lives online and with their phone. They are quick to adopt new technology, new apps, and new habits while equally quick to abandon yesterday's ways. They are starting to shop and do business the same way, and banking will be no different.
How successful is your credit union at reaching these groups? If your answer is "not very," an aggressive mobile strategy could be a solution.
The newest generation of mobile banking applications has given credit unions the ability to extend their reach by creating a mobile branch network. What is a mobile branch? A smart phone or tablet banking application packed with so much functionality that the end-user almost has no need to walk into a brick and mortar location. Not only can they check balances, transfer funds, and research transactions, they can now locate the closest ATM, make deposits right from their smart phone's camera, send payments, initiate money transfers from other institutions, look at check images, and more. The branch of the future is here, and it sits in the palm of your member's hand.
Where Does It Fit?
Where does mobile RDC fit into the mobile branch? At the heart of it. Since launching its mobile RDC service on the iPhone in 2009, USAA customers had deposited 2.6 million checks totaling approximately $1.6 billion by the end of 2010. Meanwhile, PayPal received more than $1 million in deposits in its first month of offering the service, according to American Banker. The early adopters have proven the viability of a comprehensive mobile banking channel.
Mobile RDC gives credit unions the ability to capture a greater amount of deposits and reduce branch traffic, while improving member service. The addition of mobile check deposit functionality to a robust mobile banking solution is a crucial aspect of the mobile branch.
Andrew Tilbury is director of marketing for Bluepoint Solutions. For info: www.bluepointsolutions.com.