Most banks have gotten the message: having a strategy to build out mobile banking is a necessity. But while a substantial percentage of banks are plotting moves into downloadable apps and other services available on smartphones, they're still not vigorously pushing the channel.
Although most banks have plans to introduce downloadable smartphone apps over the next year or so, the pace of development and deployment of downloadable apps is still rather slow, and most banks aren't doing a lot of marketing or heavy selling. A recent survey found that bank CIOs believe that consumers will expect their banks to offer mobile banking, even if not all consumers immediately plan to adopt mobile banking.
"Banks are adding functionality and are playing a wait-and-see game to assess customer take up and what their competitors are doing," says Michael McEvoy, a principal at Novarica who authored a new report on adoption trends for mobile and online. The survey, which polled more than 50 members of the Novarica Banking Council-which represents U.S. banks from across the size spectrum-found that nearly two thirds of institutions are planning to develop a downloadable mobile application. This development will narrow the gap between browser-based mobile banking and downloadable apps.
But banks are moving relatively slowly and doing limited marketing, a fact that McEvoy finds surprising, given the importance of mobile to banking in the future. One reason for the deliberate approach is that most banks rely on third party vendors to provide mobile technology, dependence that Novarica's research attributes to the heavy compliance and audit burdens that deter smaller financial institutions from engaging in in-house development of mobile applications.
The vendors themselves are just starting to develop technology to enable downloadable mobile apps. "A number of banks are looking to see what [tech firms] are doing in the mobile space that would provide at least a white label downloadable app," McEvoy says.
The survey also queried the CIOs about online banking. In that area, remote deposit capture, bank-to-bank transfers and person-to-person payments are the features most likely to be added in the coming year.
