Fast Facts: Student Loans

January 22, 2013
/   Insights

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Topics span TARP, Dodd-Frank, insurance, lending, retirement savings and more.  Below are some updated Fast...

Cause and Effect: If you build it, will they come?

July 23, 2014
/   Spotlight

Many financial institutions assume that digital banking is lucrative because the most valuable customers happen to bank online. While there is certainly a correlation between online bankers and higher profitability, quantitative evidence suggests that...

Intuit 2020 Report: The Future of Financial Services

April 11, 2011
/   Insights

Today, Intuit released the latest edition of the Intuit 2020 report, Intuit 2020 Report: The Future of Financial Services, which identifies and examines four key trend areas that will  transform the financial services industry...

The Top 10 Trends in the Digital Banking Industry

December 18, 2013
/   Spotlight

2014 is rapidly approaching and as the year wraps, the Digital Insight team has pulled together the top 10 trends in the digital banking industry based on data and trends from studying financial institutions....

Small Business: Perception vs. Reality

November 21, 2012
/   Insights

In the most recent election cycle, like most others before it, the one sector of the economy that got the most attention was small business.  This is the future, we were told by every...

Industry Perception, Optical Delusion

January 14, 2013
/   Insights

In Washington, they talk a lot about ‘optics.’ This has nothing to do with regulatory scrutiny, or government mandates on eyeglasses. It has to do with perception—how something looks, the way a particular story...

Financial Literacy Month: How are you celebrating?

March 22, 2013
/   Insights

With April approaching, it’s almost time to kick off Financial Literacy Month! Strongly supported by the United States Congress and the Financial Literacy and Education Commission, Financial Literacy Month aims to promote the importance...

Social Banking: Blessing or Curse?

August 1, 2012
/   Insights

While the topic of Facebook and banking has generated plenty of heat (though not necessarily a lot of light), the debate seems mostly focused on two broad issues: The much-maligned IPO, and the notion...

For everyone from lazy millennials in the suburbs to disadvantaged denizens in under-developed regions, this is a game-changer.

It almost seems inevitable. Just as the onset of online banking capabilities upended traditional industry practices, the slew of mobile banking apps now on the market, and the heavy adoption of those technologies by ‘millennials’ in particular, was bound to make even online banking look old-fashioned. Still, the emergence of mobile-first, or even mobile-only, banks is startling.

Of course, it’s not exactly a revolution. . .yet. Take the newest entry, BankMobile, which is actually a division of publicly held Customers Bancorp and the parent entity of Customers Bank. This is a traditional corporation in every sense of the term, with 14 branches/offices in three states and assets listed as $6.5 billion as of August, 2014.

However, BankMobile makes its own characteristics clear with a high level of attention-getting. It bills itself as the “first bank in the country to offer free checking and savings accounts without any fees, as well as a line of credit, access to over 55,000 surcharge free ATMs, and a higher savings rate than the top 4 banks in U.S.” That’s a potent lure in an environment where consumers and institutions routinely shell out billions in overdraft fees.

And then, of course, there’s the technology. It’s not in dispute that many aspects of life that previously took time now can be managed in seconds with a few clicks on the smartphone or tablet, yet it’s still a drag opening a bank account. Now it can be done with an image of the driver’s license, without setting foot in any branch.

That’s just one of the many technology-driven advantages of this form of banking—there are myriad features and capabilities designed specifically to enhance ease of use and expedite every interaction. This is also why, especially for younger consumers weaned on instant gratification without undue effort, the appeal of an all-mobile financial services institution is potentially undeniable.

To be sure, there are other emerging players on the horizon. Check out Number26, a German entry in this dynamic category. There’s a raft of capabilities enabled by the click of a button—for example, money management tools that automatically bundle all cash outlays into pre-defined categories and a ‘push’ notification for all debit card transactions.

But there’s an even bigger picture that deserves attention. Quite simply, mobile banking can effectively change the world by bringing banking to communities that otherwise have no access to it.

M-Pesa, the mobile-phone based money transfer and micro-financing service launched in 2007 took less than three years to become the most successful mobile phone-based financial service in the developing world. Originally created for Kenya, there are now similar services in other developing markets, with many more planned. That’s because they cater to a vast demographic that would have seemed absurd only a few years ago: the millions of people who have no bank account, and perhaps no permanent job or home, but do have a mobile device with a long-distance service provider.

No less a visionary than Microsoft co-founder (and coincidentally world’s richest man), Bill Gates, serving as guest editor of The Verge, lays out his thinking on the idea of mobile banking thus: “In the next 15 years, digital banking will give the poor more control over their assets and help them transform their lives. . .By 2030, 2 billion people who don’t have a bank account today will be storing money and making payments with their phones. And by then, mobile money providers will be offering the full range of financial services, from interest-bearing savings accounts to credit to insurance.”

In retrospect, let’s remember that the arrival of Internet-enabled banking shook the very foundations of traditional banking. It’s almost inconceivable that mobile banking, or let alone mobile-only banking, will have even greater ramifications, but it will. For some individuals and institutions resistant to change, this is troubling. For the rest—those attuned to change and opportunity—it’s the best news in a long time.

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James W. Gabberty

Gabberty is a professor of information systems at Pace University in New York City. An alumnus of the Massachusetts Institute of Technology and New York University Polytechnic Institute, he has served as an expert witness in telecommunication and information security at the federal and state levels and holds numerous certifications from SANS & ISACA.

Marisa Mann

Marisa Mann brings over 15 years of experience in consulting and financial services industries to the Solstice team, working on large scale enterprise initiatives across many technologies, including specializing in the digital space – Internet and mobile. Mann is passionate about mobile and the endless possibilities for the enterprise, delivering business value through strong brand recognition and driving to excellence in the consumer experience. Prior to Solstice, Mann worked at JP Morgan Chase, Diamond Management and Technology Consultants, Washington Mutual, Inc, and Accenture.

Zachary Ehrlich

25-year-old writer, and as a native San Franciscan, I am unreasonably loyal to Bank of America, if only for their superhero-like origin story, involving the 1906 earthquake and Italian fruit vendors.

Brad Strothkamp

http://www.forrester.com/rb/analyst/brad_strothkamp