Convenience, for banking customers, used to mean being able to make a phone call for your balance. About 15 years ago, it evolved to mean the ability to check your accounts on your home computer, 24 hours a day.
Today, banking convenience has moved even farther up the continuum of right here, right now. Mobile banking, the blanket term for conducting bank inquiries and transactions by mobile phone, enables customers to monitor their money while watching TV, traveling, dining, watching a ball game, or even sitting in the hot tub.
Mobile banking has really redefined this notion of convenience, says Jinee Ellis, vice president of mobile banking for Wells-Fargo, one of the first banks to introduce mobile banking in 2002. When customers think of something, such as Did that check clear? or Did I make that payment? theyre able to take care of that item right away and essentially do away with their to-do list, which is a lot easier than having to make a mental note.
Theyre able to actually fit banking into their lifestyle on a daily basis, as opposed to having to set aside time to do their financial tasks.
An estimated 200 million people worldwide make use of mobile banking now, according to Juniper Research. That number is expected to double in the next two years.
Although several companies, including Wells-Fargo, first introduced some form of mobile banking in the early 2000s, the trend didnt start picking up until 2007. In fact, Wells- Fargo and most other banks dropped the service early on because people werent ready for it, says Mary Monahan, executive vice president for Javelin Strategy and Research.
But since its second go-round, mobile banking has rocketed in popularity. In 2008, just 12 percent of adults with mobile phones partook of mobile banking, Monohan says. By 2009, that percentage had grown to 18 percent.
While the mobile banking community grew little during 2010, a blip Monahan attributes to the struggling economy and a drop in mobile phone ownership, the trend is now growing again.
JP Morgan Chase saw its mobile banking users grew from 3 million in early 2010 to 10 million today, says spokesperson Eileen Leveckis. Bank of America has 7 million mobile bankers, says consumer market executive Steven Lee, and Wells-Fargo had 5.5 million mobile bankers at the start of this year, according to Ellis.
Even small local institutions like Manatee Community Federal Credit Union have begun offering limited versions of mobile banking. Spokesperson Suanne White says Manatee Community began offering a text version of mobile banking six months ago, and estimates that six of 10 customers are now making use of it.
Its still in the early stages, White says, But its the trend now. Youve got to keep up with everything now, especially with what the young people are doing.
Texting is one of three forms of mobile banking currently offered. Customers can use code words to request balance information, set up automatic text alerts about balances and transactions, and even transfer limited amounts.
Another form of mobile banking is to log on to websites crafted specifically for smartphone browsing. They also offer limited services; for instance, Wells-Fargo doesnt allow customers to set up automatic bill payments through its browser, Ellis says, because doing so would make for an unwieldy user interface.
Our design principle is, we want to mobilize and not miniaturize, she says. We dont want to take our online stuff and just shrink it. We want to make sure its optimized for mobile devices.
The most service-packed form of mobile banking is through downloadable applications, which allow almost every imaginable banking service. Customers can not only check balances, transfer money among accounts, and arrange payments; with some banks, including Chase, they can also deposit checks by taking a picture with their mobile phones.
Our customers love QuickDeposit, Leveckis says of Chases mobile remote deposit program. Its so convenient and so timely, and its fitting in what our customers need right now as they continue to use their smartphones more and more.
Mobile remote deposit is still not offered by most banks, but Javelins research shows that it soon will be, Monahan says.
Its a hot product. Many consumers want it, she says. We took a survey and found that one out of four desired it. Our normal consumer interest is only 9 percent, so when you see that 24 percent want it, thats really high for a financial product.
Among mobile bankers, 52 percent of consumers want it. We also did a survey of 25 bank executives, and 50 percent said that within a year, theyd be offering it.
Security remains the greatest barrier to widespread public acceptance of mobile banking. In fact, White says lingering security concerns are the reason why Manatee Community hasnt pursued mobile remote deposit.
Concerns about security are even more widespread given the growth in popularity of the Android smartphone, which Monahan says overtook the iPhone this year on the smartphone market.
Its an open platform, its put out by many carriers in many models, and its cheaper, Monahan says. But its also less secure. So we advise that consumer wait for a while before they download and app from the Android market. Let it get vetted by the market.
Monahan also recommends that consumers download antivirus software onto their smartphones before participating in mobile banking.
Banks need to build secure applications, but the consumer also needs to be careful about what they do. They have to be just as careful with their phones as they are with their computers.
Christine Hawes, Herald business writer, can be reached at (941) 745-7081.