First Annapolis Consulting recently completed its 2014 Mobile Banking Study, which highlights the growing importance of mobile banking among the top 100 US regulated depositories.
Key findings include:
- Nearly all financial intuitions covered in the study now offer some form of mobile banking;
- Basic and advanced account servicing features (bill pay and mobile remote deposit capture) have experienced rapid growth and are nearly ubiquitous; and
- Payments-related features have experienced slower adoption, concentrated among the larger financial institutions
Figure 1: Mobile Banking Overall Results
Source: First Annapolis 2014 Mobile Banking Study.
The proliferation of mobile devices continues to encourage banks to offer mobile banking and to increase the number of channels through which these services are available. Of the top 100 banks, 97 now offer some form of mobile banking, compared to 81 in 2012 – writes Jeff Crawford, Manager in the Deposit Access practice, specializing in Mobile Payments, First Annapolis.
In addition, most banks are pursuing a multi-channel approach in which services are provided through mobile web, application, and SMS-based platforms (Figure 1). Android has become as widely adopted as iOS, signaling an important shift in smartphone adoption among consumers (Figure 1).
Figure 2: Basic & Advanced Transaction Functions Utilized by Banks
Source: First Annapolis 2014 Mobile Banking Study.
Basic banking features have spread from the largest institutions to the smaller players over the past two years. Balance inquiry, transaction history, intra-account transfer, and branch location functionalities are now offered by more than 80% of the market (Figure 2).
Growth of advanced features offered by the top 100 banks since 2012 has been mixed. Mobile remote deposit capture and bill pay have grown rapidly from 24% and 66% of the market to 69% and 89%, respectively, while payments-related features ( e.g. P2P payments, mobile wallet participation, and mobile offers) experienced slower growth and are generally limited to the larger players in the market (Figure 2).
This dynamic reflects the unclear business case, higher investment requirements, and unproven solutions for many features. As more service providers enter the market, and as new technologies such as NFC HCE and Bluetooth Low Energy catch up to meet the safety and convenience required for these solutions, we expect more rapid adoption among consumers and their financial institutions.
Mobile devices continue to supplement and replace traditional banking channels, making mobile banking a necessity for any bank hoping to grow, serve, engage, and monetize its user base. This fact provides ample incentives for banks to continue to develop and add features, with larger, more sophisticated players likely leading innovation and smaller players rushing to keep pace with the market.
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