According to an AVG Digital Skills Study in 2010 presented at the ABA Marketing Conference, 30% of U.S. toddlers can operate a smartphone or tablet app. This may or may not surprise you. It does not surprise me as my daughter, by age two, knew how to “slide to unlock” on the iTouch, go to the Entertainment folder, select Peek-A-Boo Barn, play her game until she was board and then go back to the folder to select a new game. Now this doesn’t mean that I’m a bad parent (I hope) or allow technology to babysit my child, it’s just an example of how “times, they are a changing” and technology is something the next generation is born with not being able to live without.
Because we as a society demand information at our fingertips and have the expectation of immediate gratification with our smartphones, banks are readying themselves for market capture. Mobile banking isn’t something new but it is something that many of our community banks are just getting into.
Launched two years ago, mobile banking was invested primarily by the large, national banks. In one of the many sessions on mobile banking at this year’s ABA Marketing Conference, it was cited that many of the larger banks may have launched this added feature to compensate for the areas where they were lacking (i.e. customer service, personalized attention, service fees, etc.). In terms of technology in the financial industry, mobile banking was more quickly adopted than any other technology launch. ATMs and Online Banking technologies took anywhere from four to ten years or more to acquire more than 50 percent adoption per household. Since its launch, mobile banking has seen a market penetration of 10 percent within the first two years and it is expected to eclipse Online Banking (in terms of usage) by 2014. With consumer desired features including mobile deposits (scanning an image of a check and depositing it via your smartphone app), as well as balance inquiries, transfers, etc., customers desire the accessibility to manage their funds while they’re on the go.
Additionally, with the growth of couponing companies like Groupon and Living Social, banks are also adopting personalized service features based on a customer’s spending preferences and offering discounts that relate. How would you like your bank to offer you a coupon for the GAP the next time you log in to online banking, simply because they noticed you purchased something there before? Or offer you access to determine the cheapest gas based on your location simply because they noticed you bought gas with your bank card? Approximately 76 percent of customers said they would like discounts based on spending habits, and that they would switch banks for one that offered these personalized services.
While these conveniences are steadily on the rise and becoming more and more desired, 55 percent of consumers still primarily say they select a bank based on the convenience of location more than anything. The traditional bricks and mortar bank branches will not be a thing of the past.
National banks continue to primarily be the first to test out new product and service features, but community banks will soon follow to meet the growing demand by customers. While customers may need to wait a bit longer for these benefits at their community bank, when they do come they’ll be packaged with all the benefits of local, personalized service we value from our neighborhood banks.