Mobile Banking— · Consumer use of Mobile Banking has increased over the last year. Previously,...

Mobile Banking—How Financial Institutions are Reacting One Year Later

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Mobile Banking—How Financial Institutions are Reacting...One Year Later |

Introduction

In an era of record low interest rates and no forecast for change in the next 2 years, financial institutions must now focus on other areas for differentiation. Consumers are more informed than ever carefully comparing rates, fees and services before selecting an institution. They continue to monitor these factors throughout the relationship willing to switch at any time. The fight is on among financial institutions and one service exploding with attention is Mobile Banking.

Mobile Banking use has been increasing significantly over the last two years with nearly 90% of Americans owning a mobile phone and 29% of those using Mobile Banking. That number is projected to grow to over 50% in the coming years according to Javelin Strategy & Research. Institutions are feeling the pressure to offer this service and to find new and exciting ways for consumers to access their finances through this high-tech process. Simple text messages are not enough anymore, but consumers demand convenience and speed with such things as tablet optimization and personal remote deposit capture.

RateWatch conducted an industry wide survey to identify how financial institutions are adopting the Mobile Banking Strategy.

This survey was accomplished by emailing 29.423 surveys on October 11, 2012 to contacts at 11,726 different Financial Institutions across the country; 921 unique responses were received.

Survey Results - Total Respondents

Question 1: Do you currently offer Mobile Banking services?

While a large number of financial institutions have added Mobile Banking as a service in the previous year, not everyone has jumped on the bandwagon just yet. Just over 50% of respondents are not currently offering Mobile Banking. That percentage will continue to decline, however, with over 50% of those that do not offer now planning to add the service in the next year despite citing security and cost as top concerns holding them back.

49.19% of institutions are currently offering Mobile

Banking services - an 8.6% increase over one year ago.

YesNo49.19%50.81%



Question 2: If no, to what extent are the following concerns holding you back?

Abili

ty to

Serv

ice/

Mai

ntai

n

Spee

d

Secu

rity

Highly Concerning

Very Concerning

Moderately Concerning

Slightly Concerning

Not ConcerningPe

rson

aliz

atio

n

Cost

Highly Concerning 34.32% 3.58% 14.66% 35.01% 7.55%

Very Concerning 27.23% 10.74% 29.79% 26.54% 11.56%

Moderately Concerning 23.57% 38.19% 30.73% 24.26% 36.56%

Slightly Concerning 8.47% 18.14% 13.00% 8.70% 22.41%

Not Concerning 6.41% 29.36% 11.82% 5.49% 21.93%

Security Speed Ability to Service/Maintain

Cost Personalization

The levels of concern for each issue remained consistent from 2011 to 2012.



Question 3: When do you plan to add the service?

In th

e ne

xt 3

mon

ths

In th

e ne

xt 6

mon

ths

In th

e ne

xt 1

2 m

onth

s

We

have

no

defin

ite

timef

ram

e35.45%

20.00%14.32% 16.14%

We

do n

ot p

lan

to o

ffer

at th

is tim

e

14.09%

Question 4: What features will be part of your Mobile Banking? Check all that apply

72.35%

96.31%100%87.56%

70.97%

27.65%33.18% 32.26%

*Respondents who answered "we do not plan to offer at this time" went on to question 18. Respondents who answered "In the next 3 months, 6 months, 12 months or we have no definite timeframe" went on to question 4.

11.06% 7.83% 4.61%

21.20%

Oth

er

0.46%

Chec

k Ac

coun

t Bal

ance

s

Tran

sfer

Fun

ds

Acco

unt A

lert

s

Mak

e Lo

an P

aym

ents

Pay

Bills

P2P

Pers

on-t

o-Pe

rson

Tran

sfer

s

A2A

Acco

unt-

to-

Acco

unt T

rans

fers

Rem

ote

Dep

osit

Capt

ure

Busin

ess A

ccou

nt

Acce

ss

Mob

ile W

alle

t

Cred

it Ap

plic

atio

ns

Ope

n an

Acc

ount

One year ago, 39.10% had plans to add Mobile Banking within 12 months. Currently, 50.46% will be looking to add the service in the coming year.



Question 5: If yes to Question 1, how long have you been offering this service?

Question 6: Which Mobile Banking vendor do you use?

About RateWatchSince 1989, RateWatch has been providing financial institutions with a variety of tools to accurately assess their position within their marketplace. Providing competitive rate and fee data for deposit and loan products, clients across the country map out their position and confidently make pricing decisions to maximize profit potential. With additional products and services to analyze market share, product line offerings, and historical trends, competitive comparisons and self-analyses are well rounded. Owned by TheStreet, Inc, based in New York, NY, RateWatch headquarters are in Fort Atkinson, WI.

For more information: www.rate-watch.com (P) 800.348.1831 (E) [email protected]

Less than 6 months

6 months - less than 1 year

1 year - less than 2 years

2 years - less than 3 years

16.28%

9.16%

28.75%

16.03%

3 or more years

29.77% Access Softek

First Data

FIS

Fiserv

2.31%

6.15%

2.82%

8.46%

Harland Financial Services

28.21%

Intuit 10.26%

Jack Henry 13.59%

Wescom 0.77%

Other 27.44%



Question 7: Which Mobile Banking services do you offer? Check all that apply

Question 8: What percentage of your customers/members use Mobile Banking?

Text

Mobile version of your website

iPhone App

iPad App 27.76%

68.89%

68.64%

77.63%

Android App 60.67%

Android Tablet App 18.25%

Blackberry App 22.11%

Other 1.80%

Less than 5%

5% - less than 25%

25% - less than 50%

50% - less than 75%

75% or greater

50.99%

38.59%

6.48%1.13% 2.82%

Text and Mobile Website availability have decreased from 2011 (down from 72.76% and 83.87% respectively) while iPhone, Android and Blackberry Apps have all increased (up from 49.03%, 35.48% and 20.65%) with Android Apps making the largest jump.

Consumer use of Mobile Banking has increased over the last year. Previously, institutions cited 55.63% of customers using the services less than 5% of the time. The most significant increase was seen in the 75% or greater category with 0% of institutions seeing any use this high in 2011.



Question 9: Rank the tasks your customers/members can perform using your Mobile Banking in order of popularity.(1 is the most popular and 12 is the least popular. An average is calculated based on the number of responses each item received for each value 1-12.)

Check Account Balances

Transfer Funds

Pay Bills

Account Alerts

#1 (1.64 Rating Avg)

A2A Account-to-Account Transfers

Make Loan Payment

Business Account Access

Remote Deposit Capture

P2P Person-to-Person Transfers

Mobile Wallet

Credit Applications

Open an account














Question 10: What effect has offering Mobile Banking had on your institution?

Reve

nue

IT C

ost

Bran

ch Tr

affic

Increased

Decreased

Stayed the Same

Youn

ger C

lient

ele

Clie

nt L

oyal

ty

Increased Decreased Stayed the Same

Branch Traffic 1.19% 11.34% 87.46% 100%

IT Cost 61.79% 2.69% 35.52% 100%

Revenue 8.43% 8.13% 83.43% 100%

Client Loyalty 55.52% 0.30% 44.18% 100%

Younger Clientele 56.12% 0.00% 43.88% 100%

Cost per Checking Account 23.51% 12.80% 63.69% 100%

Staffing 2.09% 2.09% 95.82% 100%

Total

Staf

fing

Cost

per

Che

ckin

g Ac

coun

t



Question 11: Rank the following marketing channels in order of marketing dollars you spend on each.

Question 12: What were your initial investment requirements to offer Mobile Banking?

Website

Radio Advertising

Newspaper Advertising

Foot traffic/onsite Advertising

Direct Mail

Email Marketing

Less than $2,500

$2,500 - less than $10,000

$10,000 - less than $20,000

$20,000 - less than $40,000

$40,000 or greater

43.93%

19.67%

10.49%

3.61%

22.30%







In general, financial institutions are paying more in 2012 to enter Mobile Banking. In 2011, 36.81% invested less than $2,500, while only 41.67% invested $2,500 - less than $10,000, 13.19% invested $10,000 - less than $20,000 and 3.47% invested $20,000 less than $40,000. 2012 did see a decrease in those investing $40,000 or greater with 4.86% investing this amount in 2011.



Question 13: How much does your Mobile Banking vendor charge as a flat monthly fee?

Question 14: How much does your Mobile Banking vendor charge as a monthly per user fee?

Question 15: How do you charge your customers/members for Mobile Banking? Check all that apply

Som

e ac

coun

ts h

ave

mon

thly

fees

Som

e ac

coun

ts h

ave

per u

se L

og In

fee

Som

e ac

coun

ts a

re fr

ee

Char

ge fo

r ind

ivid

ual

serv

ices

such

as B

ill P

ay,

RDC,

Tran

sfer

s, et

c.

3.93%6.56%5.57% 0.33%

Char

ge fo

r app

0.66%

All a

ccou

nts a

re fr

ee

88.52%

Less than $250

$250 - less than $500

$500 - less than $1,000

$1,000 or greater10.49%

15.08%

20%

26.23%

My vendor does not charge a flat monthly fee

28.20%

7.86%

14.29%

21.43%

26.43%

30.08%

2012

2011 Less than $1

$1 - less than $3

$3 - less than $5

$5 or greater0.66%

4.26%

31.15%

30.49%

My vendor does not charge a monthly per

user fee

33.44%

0.72%

2.71%

30.43%

23.91%

42.75%

2012

2011

2012

2011

N/A1.30%1.95% 1.30% 0%

98.05%

Fees have generally increased from 2011 to 2012.



Question 16: How likely are you to start charging for Mobile Banking in the next 12 months?

Question 17: Why did you start offering Mobile Banking? Check all that apply

To be the thought leader

To attract younger generations

Mobile Banking is a must in today's environment

To compete with larger institutions

61.97%

86.89%

24.59%

65.90%

Other 2.95%90.37%

9.26%

0.37%

Not likely Somewhat likely Very likely

More institutions in 2011 were not likely to start charging for Mobile Banking (97.39%), however there were also more very likely to start charging ( 1.31%).

Fewer institutions are concerned about being a thought leader or attracting a younger generation in 2012 (down from 29.61% and 76.97% respectively in 2011). Competition appears to be more of a trigger in 2012 with an additional 9% of institutions citing this as a motivating factor.



Question 18: Please indicate your institution's asset size.

Question 19: Please indicate your institution's type.

$200

Mill

ion

- les

sth

an $

500

Mill

ion

$100

Mill

ion

- les

sth

an $

200

Mill

ion

Less

than

$10

0 M

illio

n

20.09%17.92%27.25% 23.67%

4.45%6.62%

Did

not

ans

wer

$1 B

illio

n or

gr

eate

r

$500

Mill

ion

- les

s th

an $

1 Bi

llion

Did

not

ans

wer

Cred

it Un

ion

Bank

23.67%23.13%

49.84%

3.37%

Savi

ngs &

Loa

n



Question 20: Please indicate the state your institution is mainly located.

Results presented by region

Sout

h Ce

ntra

l

East

ern

Cent

ral

10%

25%33%

8%

Wes

tern

24% of respondents did not indicate the state their institution is located in.

Mobile Banking— · Consumer use of Mobile Banking has increased over the last year. Previously,...

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Transcript of Mobile Banking— · Consumer use of Mobile Banking has increased over the last year. Previously,...