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Washington Trust Co. in Westerly, R.I., a subsidiary of Washington Trust Bancorp Inc., has hired Joseph J. MarcAurele as president and chief operating officer of the bank and its parent and elected him to both entities’ boards of directors.
Monthly Archive for July, 2009
Masabi has collaborated with Mi-Pay to develop Street Vendor, a mobile transaction system. The system allows mobile operators, banks and other retailers to offer their services in remote regions without additional investment in infrastructure or hardware, using the existing installed mobile phone base.
Fiserv Inc. announced this week its new mobile financial services solutions Mobile Money and Mobile Money FastTrack. The solutions were developed with M-Com and incorporate M-Com’s RenderRight, a new rendering engine that customizes the mobile-banking interface to a user’s specific mobile device.
Like MobileNOW!’s, many mobile payment schemes have taken hold overseas while remaining in niche pilot stages across the U.S. But with 270 million wireless subscribers nationwide at the end of 2008, representing 87% of the U.S. population, according to CTIA Wireless Association, experts say there’s good reason to believe that mobile payments will become as widespread as Internet banking and ATMs (there are others, of course, who have their doubts). If banks aren’t ready, other providers, such as wireless phone carriers and payment vendors, will steal the show.
The core product of ClairMail, Inc., the ClairMail Solution, has reportedly experienced more than 700 percent year-over-year increase in monthly mobile banking transactions.
Industry research firm Mercatus LLC recently released findings from their consumer survey noting that mobile banking adoption had grown to 21 percent among 18-25 year olds. This is a huge leap from their May 2008 survey, which showed adoption of only 7 percent by the same demographic. Enrollment and usage of mobile banking among the 25-34 year-old segment also grew to 16 percent, up from 7 percent. In fact each older demographic saw an uptick in mobile banking adoption.
The key takeaway here is not that mobile banking is growing—every industry survey/research report shows that. What’s important is that mobile banking adoption is accelerating most greatly among younger generations. While this tracks with the adoption curve of many new technologies, this also represents a great long-term opportunity or risk for banks.
The opportunity:
In general the younger the banker the more simple the account relationship with their financial institution. However, young bankers who may begin with a simple debit account when they are kids, grow and eventually enter the workforce. As they age, so too will the financial products they use grow in number and complexity.
Among other things, what 18-34 year-olds have in common is an increasingly close and reliant relationship with their mobile devices. Whether they have the newest smartphone or an older handset, this demographic expects more and more utility from that personal communications device. Financial institutions that get this on a deep level are pursuing and honing multi-functional mobile banking services that meet the needs of all of their banking customers, while satisfying the voracious service appetite of their youngest bankers. The small wallets today will become the engine of bank growth down the road.
The risk:
Financial institutions that choose to exclusively service their most complex/high-net worth older clients today with old-line communications and services, risk alienating and losing young bankers over time to more forward thinking banks. Mercatus estimated that in the next couple of years, bank customers, especially the young, will begin to chose their financial institutions based on their mobile banking offerings.
I will take that a step further and venture that waiting 24 months to initiate a best-of-breed mobile strategy within your bank will be enough time to allow competitors to capitalize on an aggressive mobile strategy that will cost slower banks a percentage of their customer base that they may never be able to regain…
