The Hits And Misses Of Mobile Banking

The Hits And Misses Of Mobile Banking

Mobile banking is fast becoming standard—much like the ATM. Nine in 10 banks and credit unions recently surveyed by the Federal Reserve Bank of Atlanta now allow you to access your bank account, and sometimes more, through a mobile app or browser.
couple at the bank
couple at the bank Source: Getty Images

The institutions that don’t yet offer mobile banking largely plan to add it by next year.

Yet few consumers have switched fully to banking over their smartphone or tablet. That’s in part because banks aren’t willing or able to allow customers to do everything on mobile that they do in person or on their computers.

But customers themselves prefer doing only certain tasks via mobile, while executing others in person or over the phone even if a mobile option is available. A look at mobile banking’s hits and misses may help you decide if you should "app up," and which tasks are best suited for mobile.

Mobile-Banking Hits

Monitoring Accounts

This is mobile banking’s home-run. More than nine of 10 mobile-banking users check their account balance or recent transactions via mobile, according to another survey by the Federal Reserve. Three in five did so before making a huge purchase. Such usage may align with the generally younger age of mobile-banking customers, according to Bill McCracken, CEO of Phoenix Synergistics, a research firm for the financial services industry. For such customers, he notes, balances are often low "and they need to be careful with spending," McCracken says.

Transfers and Deposits

More than half of mobile-banking users transfer money between their accounts. Depositing a check using a phone’s camera also has caught on; nearly half of mobile-banking users have done it. That’s despite some lack of clarity by many apps about deposit limits and when funds will become available, says Andrew Hovet, a director for Novantas, an analytics and advisory firm.

Getting Alerts

Over half of mobile-banking customers have also elected to receive alerts on their phone. The most common of these are for low balances, payments due, deposit or withdrawal, statement available notice and fraud.

Nearly all financial institutions support alerts and continue to expand the types they offer. That said, there’s room for improvement here, too, Hovet says. Many of the banking alerts aren’t in real time, which is a must for customers who regularly run low on funds. "If you spent $250 dollars and you don’t have much left over, wouldn’t it be nice to know that?" says Hovet, who notes that the real-time technology exists and is widely used by credit card companies.

Mobile-Banking Misses

Mobile Payments Via The Bank

This all-encompassing area includes any payments—purchases, donations, bills—made via mobile phone, whether in store or through an app, browser or text.

Non-financial institutions have made headway in this area—think: Venmo, PayPal and Square Cash. Yet a little over a fifth of financial institutions even offer mobile payments. Just over a third plan to roll the capability out within one to two years, according to the Atlanta Fed. That still leaves just under half of financial institutions out.

One possible reason why banks aren’t rolling out mobile payments is a lack of demand. According to the Atlanta Federal Reserve study, nine out of 10 banks and credit unions with the technology report that enrollment and usage levels are below 5 percent—perhaps because interested customers are "Venmo-ing" instead.

Not that the banks have entirely relinquished mobile payments to third-party players. This year, 19 major banks have teamed up to provide their own person-to-person payment app called Zelle in a bid to create a rival to Venmo and others in the market.

Customer Service

Banking customers still seem to want someone they can see and hear when they run into problems or need changes. They seem resistant to get customer service via their mobile device.

Consider the following from a survey from Phoenix Synergistics:

  • Only 11 percent of consumers want to deal with a lost or stolen card via mobile; 51 percent want to visit a branch.
  • Only 10 percent want to change their name or address on an account via mobile, 46 percent prefer visiting a branch.
  • Only 10 percent want to deliver a complaint or comment via mobile; 35 percent want to go to a branch.

The takeaway? "It’s not the same as seeing someone in person or hearing someone’s voice on the phone," says McCracken. "There’s no empathy."

More Complex Transactions

Another lagging area is more complex transactions. Just 3 percent of consumers prefer opening a new account on their phone, compared with 63 percent at a branch, per Phoenix Synergistics. The results are similar for auto loans (2 percent via mobile, 57 percent at a branch) and mortgages (2 percent via mobile, 60 percent at a branch).

"Part of the reason is that many banks don’t have mobile phone capabilities to apply for a mortgage or auto loan," McCracken says. "But customers aren’t clamoring for the capability, either."