Mobile banking is still in its infancy, but researchers and analysts are already forecasting its prevalence in the not-too-distant future. Despite the optimism, some variables have banks and their customers slow to fully embrace all the possibilities of mobile banking. Still, the technology offers major upside for marketers in the financial services industry. But in order to capitalize, they first need to know the details.
What’s driving mobile banking?
It’s predicted that by 2017, there will be more than 1 billion mobile banking users (worldwide, of course). Naturally, the smartphone has a lot to do with mobile banking’s early success, but a lot of credit should go to tablets as well. While only accounting for 9% of mobile banking transactions right now, that number is expected to jump to 19% in four years.
Also contributing to mobile banking success is the disappearance of physical bank branches. According research from SNL Financial, there was a net closure of 1,118 branches nationwide. While that may not sound like a lot, it is indicative of a cost-cutting trend more banks are buying into, leaving fewer branches in less marketable locations. Naturally, this will push more users to digital banking, and most likely mobile banking.
Where is the financial industry slow to adopt?
Where banks are slow to jump onboard is in embracing the emergence of mobile wallets. According to CMS Wire, banks are reluctant to go all-in on the new technology despite the fact that mobile payments (those made through mobile wallets) are expected to become a $90 billion industry by 2017. The primary reason: skepticism
As CMS Wire reports, “Customers don't understand the technology, and banks and mobile carriers are weary of government regulations on what data can be transmitted via mobile devices.” Additionally, banks argue that demand for the technology simply isn’t where it needs to be for them to invest in building out or supporting the functionality.
While valid, these concerns may be a little shortsighted. One needs look no further than across the pond to our U.K. counterparts for evidence of the long-term possibilities. When asked which mobile wallet provider they would be most interested in using, the greatest percentage of respondents said they would prefer their bank to a tech company. In just six months, between May 2012 and Nov. 2012, mobile wallet use doubled from 4% to 8% of Internet users. With 28% of the British population already using mobile banking, there’s definitely reason to believe a new channel is developing for banks and their marketing teams to cultivate.
How does this impact marketing?
With the growth of mobile banking only being reinforced by mobile wallets, what do marketers need to do to capitalize on both of these trends? Here are some suggestions:
- The first order of business, if it hasn’t been done already, is to optimize your mobile site. This means more concise content that enables faster click-through for the user to get where they want to go.
- Second, launch mobile marketing campaigns. As users become more comfortable with mobile banking, capitalize on the high open rates of mobile e-mail to capture impressions and possibly leads with specialized offers.
- Third, offer incentives to use online banking, especially your bank’s mobile wallet (if one is developed). As the U.K. study above notes, people who used online banking regularly were also the most likely to report intending to stay with their main bank.
- Finally, educate your audience. Make sure your customers know what you’re offering so they look to you as the expert.
Mobile banking is becoming the predominant means by which customers handle their money. Through tablets and smartphones, marketers have new mediums to tailor their message to and new opportunities to grow their business – provided they act with a sense of urgency now.