5 Positive Aspects of Mobile Banking
Over the last five years or more, mobile banking services have been steadily gaining greater popularity with consumers. What was once a convenience that appealed only to the tech savvy has slowly transformed into the type of service that most, if not all, customers will soon expect from their banking institutions. Research firm, Frost and Sullivan estimate that nearly 45 million consumers regularly take advantage of mobile banking options, and they predict that number will only increase as more and more people make the move to smartphones and other mobile devices.
While the benefits of mobile banking for consumers is clear (convenience, security, ease of access), it also presents some distinct advantages for the banking industry itself. As more and more consumers turn to mobile banking for their primary services, banks and credit unions will be in a unique position to offer their customers improved products and services, all while streamlining their operations and increasing revenue.
As more and more consumers switch to mobile banking services, financial institutions will be poised to improve their overall efficiency. For example, the costs associated with a mobile transaction are as much as ten times lower than a standard ATM transaction. Further, the cost of a mobile phone transaction can be as much as fifty times lower than an on-site branch transaction. Clearly, this offers a unique opportunity to both increase efficiency, and to lower operating costs. Banks and credit unions that are able to move 20% to 30% of their standard transactions to mobile services will reduce customer dependency on local branches. In effect, poorly performing branches can be closed, and tellers can be reassigned to sales and customer advisory positions ultimately resulting in enhanced customer experience, improvement in overall efficiency, and reduced operating costs.
Moving from Regional to National
Banks offering a full range of mobile services will be able to expand their operational footprint. No longer anchored to a single geographical location, they will be able to expand their market and increase their customer base. This also presents new opportunities to cross-sell and up-sell banking services to both existing customers, as well as to a larger pool of potential customers. True, the competition for new customers will become more vigorous, but the potential to expand into other markets and increase revenues is undeniable.
Improved Access to Products and Services
Mobile banking appeals to the consumer on the go, which is one of the primary reasons for its speedy adoption by the public. As mobile banking apps become more sophisticated, and more widely available, customers will have a greater opportunity to consider all of their financial options when making any purchase. It will be like having a virtual banker constantly on call. This is a two way street, so it gives banks and credit unions the ability to engage with their customers in real time. When a good customer is considering a significant purchase, his or her financial institution will be able to offer complimentary services, such as financing or insurance, while the transaction is in progress.
Building New Relationships
Mobile banking presents a unique opportunity for banks and credit unions to build a new type of relationship with retailers and manufacturers. Mobile banking can become more than simply a convenient way for clients to make purchases. After all, consumers use their mobile devices to research products and services before they spend their hard earned money. By partnering with the retail sector, banks can offer select incentives (discounts, coupons, etc.) to their customers before they reach the ultimate point of sale. A symbiotic relationship with the retail sector gives value to the customer, while generating a potential new revenue stream.
Leveraging Customer Analytics
Banks and credit unions are in a unique position when it comes to customer analytics as they have a more informed view of their clients’ spending habits. Information on where customers shop, what they purchase, and how much they routinely spend, is part and parcel of a client’s banking data. This opens up a new, and potentially significant, revenue stream. There is a large, and continually growing, market for consumer intelligence. Customer analytics can be bundled and sold on to retailers and others who use the data to target certain markets. However, the privacy of the banking client must always remain paramount. Still, as mobile banking becomes the norm, this type of analytical data bundling can provide an alternative value stream for banking institutions.
Mobile banking is no longer the niche service that it was five years ago. As smartphones and other mobile devices become more sophisticated, more and more consumers will turn to mobile services as their primary method for banking. While the advantages of mobile banking for consumers are obvious, the benefits to the banking industry are equally significant. As mobile becomes the new norm, financial intuitions are in the position to improve their customer service and grow their customer base, all while exploring potential new revenue streams.
This is a guest post by Sarah Brooks, from people search. She is a Houston based freelance writer and blogger. Questions and comments can be sent to firstname.lastname@example.org.