Local and regional banks, along with credit unions, have a problem. These financial institutions are far less likely to offer the latest technologies to their clients and this is especially true of mobile banking. While a significant number of clients at these smaller financial institutions do not yet use new kinds of services, demographics are changing and to maintain market share, small banks and credit unions will need to begin promoting their mobile offerings.
The latest numbers released by Javelin Strategy & Research are impressive. Over 50% of consumers will use mobile banking services by 2016. Currently, well over 90% of this country’s leading banks offer mobile banking. And the services are used by 37% of their customers. In total, 57 million U.S. consumers now use mobile banking services. Only 21% of consumers at smaller banks and 15% of credit union patrons use mobile banking. Mary Monahan, Executive Vice President and Research Director, Mobile at Javelin, attributes the differences in these numbers to demographics. “The typical mobile banking customer is young (ages 18 through 44), ethnic (typically Asian, Latino, or African American), and high income (earning more than $75K). Customers at regional and community banks and credit unions are significantly older, less wealthy, Caucasian, and less tech-savvy.”
The majority of consumers continue to access their bank account through a mobile browser, exhibiting behavior that is carried over from accessing their banking information through their desktop computers. But as more banks roll out apps, consumers have begun to access their accounts through these apps. Designing apps or even SMS text banking services will help smaller banks and credit unions keep their current customers and perhaps gain new ones. Jim Van Dyke, President, Javelin, emphasizes the importance of this change saying, “Smaller banks and credit unions have always prided themselves on providing superior customer service, so they cannot continue to ignore the mobile channel.”[Source: Smaller Banks Facing Widening Gap in Mobile Banking. Javelin.com. 6 Feb. 2012. Web. 13 Feb. 2012]