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AlixPartners: Mobile Banking Now Mainstream Behavior

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March 12, 2014

AlixPartners: Mobile Banking Now Mainstream Behavior

By Steve Anderson
Contributing TMCnet Writer

Back when the whole idea of widely-available home Internet was getting started, the idea of shopping online was a perilous one with scammers eager to steal that very credit card being used to buy that thing online. But after security picked up and it became clear that Internet theft was on about the same level as local theft, it became a mainstream option. The idea of online banking did likewise, and so too—as a new report from AlixPartners reveals—did the idea of mobile banking.

The AlixPartners study—titled the “AlixPartners Mobile Financial Services Tracking Study”--shows that a majority of users are coming to regard the entire idea of mobile banking as a vital one. Sixty percent of smartphone and tablet owners surveyed as part of the AlixPartners study reported that a switch had been made in the bank of choice largely on the strength of mobile banking capabilities, with that number citing the presence of mobile banking as either “important” or “extremely important.”

That's a big step—basically people were switching banks outright on the strength of mobile banking, at least in part—but it only gets more pronounced from there. Mobile banking services are now being used by better than one in four—28 percent—of U.S banking customers. That in turn is up fully four points from just the first half of 2013, and up another nine points from the fourth quarter of 2012. Two straight periods of increase suggests a trend, and AlixPartners reportedly expects that trend to carry on as more and more mobile devices find the way into users' hands.

What's more, the traditional banking offerings—branch service and call centers featuring actual humans—seems to be suffering a decline. Mobile banking users visit a bank branch 39 percent less often per month after adopting mobile banking. While the need for a bank teller or a customer service center with real humans likely won't go away, it will likely decline, and that will leave banks with something of a choice to make in terms of how staffing is established and in what proportions. Essentially, banks are left with little option but to offer mobile banking options or risk being rendered irrelevant and wide open to the advances of competitors who will. We have many more videos on this and other subjects at this link.

Banks that fail to offer mobile banking options don't just lose now, but said banks are more likely to lose later. The AlixPartners report notes that the use of mobile remote deposit capture (RDC) is up, and tends to be up among the younger and wealthier demographics. This is where the future of banking is, and those banks that aren't ready now will likely find business in decline. Banks straddle a fine line. Not only must banks be ready to take care of the more traditional customers who prefer actual human service, but banks also must be ready to take care of the customers who want mobile banking, a demographic that essentially represents the future of banking. This particular development has shown up in many industries, and poses issues of its own, particularly in terms of what happens to a larger market in which many people are out of work, replaced by increasingly intelligent machines.

Still, in the short term, it's clear that banks need to adapt, and that means bringing in more mobile systems to address customer needs. The long term implications are a bit less certain, however, but will likely make a huge difference going forward.

Edited by Cassandra Tucker

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