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This week, we sat down to chat with Javelin Strategy & Research’s senior multichannel financial services analyst, Mark Schwanhausser, to discuss the current state of mobile banking and payments, his market predictions and best practices for both financial institutions (FIs) and consumers who are implementing or using mobile banking. You can read more about Mark’s viewpoints on the Javelin Strategy and Research blog, or follow Javelin on Twitter.
Q: A recent Javelin report said 19 of the 30 largest US Financial Institutions now offer mobile banking. Why do you think the other 11 banks haven’t adopted mobile yet? How do you see this number changing within the next year?
A: Some of the banks that are holding out are less likely to add mobile banking because they do not have retail banking divisions, they focus on investment banking or commercial lending or they are foreign banks with depositors primarily in their home countries. To me, the more important indicator of mobile banking success is overall adoption.
Currently, fewer than one out of five consumers uses mobile banking. That’s a good start, but adoption has shown signs of flagging even though scores of smaller financial institutions are rolling out mobile banking. Availability remains an issue (8% of consumers say it isn’t offered by their bank). But that pales compared with the two biggest obstacles. Nearly half of consumers say they don’t use mobile banking because they don’t see the value of it, and 38% worry that it is unsafe. Those are obstacles that financial institutions must address. The good news is those obstacles can be overcome by demonstrating why mobile banking is practical, distinct from online banking, and safe. Read More »
