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‘App’ortunity Knocks

Mobile Banking Is the Hot Trend in Personal Finance

MobileBankingDPartMore than ever, Susan Wilson says, people aren’t content to just get around. They want to get things done, even while moving from place to place.
“Everyone is on the go, and everyone’s got some kind of mobile device, whether it’s an iPad or an iPhone,” said Wilson, vice president of Corporate Responsibility at PeoplesBank. “Take a look out the window and watch people walking down the street.”
Indeed, smartphones and tablets have made it possible for individuals to e-mail and text friends, engage in social media, and play games while on the move. And, increasingly, get a little banking done.
“Right now, we have a mobile browser and mobile apps for both iPhone and Android,” said Mike Raposo, eChannel product manager at PeoplesBank. “They can use it for transaction history, transfers, and bill payments, and we have some graphs to track their expenses; these are the main components of the mobile app right now.”
Five years after introducing mobile products to customers, the bank has witnessed a dramatic rise in their use, he noted. “We typically see about 50% growth in mobile users each year, and that’s pretty consistent with what we’re forecasting going forward.”
Joan Klinakis, senior vice president of Operations at United Bank, said her institution also launched mobile banking about five years ago and has seen a steady increase in its use.
“It is definitely becoming more and more popular,” she told BusinessWest. “We have an app customers can use; you can find it in the iTunes app store or the Google Play shop if you have an Android.” Like most banks, United also has a text offering, where customers can text a code to check information like balance transfers.
The ubiquitous nature of mobile devices has most banks following suit, including Florence Savings Bank, which introduced what it considers a ‘basic’ mobile suite in March, said Becky Lynch, eproduct manager.
“The customer can either use the browser on their cell phone, use our app if they’re running iPhone or Android, and also do SMS texting to do basic functions like account history and transferring funds, as well as get the bank’s locations and that type of information.”

Becky Lynch says Florence Savings Bank will soon expand on its recently launched mobile platform.

Becky Lynch says Florence Savings Bank will soon expand on its recently launched mobile platform.

Increasingly, a smartphone culture is becoming more accustomed to moving functions once performed on desktops to the computers they carry in their pockets and purses. Rohit Sharma of Virtusa Corp., an information-technology consulting firm, recently wrote at banktech.com that mobile devices have already displaced desktop-based Internet access and will soon become the preferred vehicle for carrying out banking activities.
In fact, as far back as late 2010, according to research by Google, more consumers were using smartphones to access the Internet than PCs, and that trend has only accelerated. “As such,” Sharma said, “the tipping point for smartphones has already arrived.”
And banks, increasingly, are responding to that shift.

Smart Response
Klinakis said use of United’s mobile platform continues to grow every month, a direct result of people becoming more reliant on their smartphones and tablets. “That seems to be where everyone is going; we see a steady increase month after month in adoption rates.”
And the shift seems to be occurring across all age groups, not just the younger generations who were the first to embrace online banking a decade ago. “It doesn’t seem to be age-related any longer,” she told BusinessWest. “It may have started out that way, but these devices are popular across the board, and everyone is following suit.”
United is no stranger to technological change, having delivered online-banking options since 1997. “Back then, we still had to mail floppy discs to customers,” Klinakis said with a laugh. “I think mobile is still something that’s still up and coming; it hasn’t plateaued yet. It’s still moving in a forward direction.”
Raposo agrees. “As more and more mobile phones and tablets get in people’s hands, the age doesn’t really matter. Whoever has mobile devices use them for their banking,” he said. “Especially over the last few years, people are feeling more secure using mobile devices for everything.”
Data security is, of course, a concern, but it’s one that customers are less anxious about, according to the banks we spoke with.
In fact, “they say nothing. They just forge ahead and use these services,” Lynch said. “We have a level of trust with them. We consider mobile part of our online channel, even though it’s not Internet-based, because the service goes through all the same security reviews and risk assessment that our online banking does. Customers don’t ask about it because they know we’re securing their online banking session, and they think of them similarly.”
Wilson agreed, noting that, “based on our adoption rates, we would say it’s not a primary concern.”
Those rates, she added, have been strong. “We’ve seen tremendous growth. We started this journey in 2008 when we introduced the mobile app, and since then we’ve been adding to it. Last year we introduced the mobile triple play,” which is a combination of browser, app, and text services on one platform.

Joan Klinakis

Joan Klinakis says growth in mobile banking is largely related to Americans’ increasing reliance on their smartphones.

Although customers turn to mobile banking for a number of uses, Wilson noted, transferring funds seems to be one of the most popular, based on the bank’s internal statistics. “Sometimes people are making some sort of impulse purchase and want to transfer the funds to make sure they’re available.” Meanwhile, she added, mobile bill payment is on the rise as well.
Lynch said the majority of users of Florence Savings Bank’s mobile services check balances and transfer funds. “If you need to pay a bill, you can move money from one account to another to avoid fees. You can set up alerts based on low balance and any other kind of activity. You can move money into savings, that kind of thing.”

Making Connections
Chrissy Kiddy, eChannel specialist at PeoplesBank, told BusinessWest that even mobile users who don’t want to download an app can engage in commerce on their smart devices through a ‘responsive website.’
“In the past, PeoplesBank has always prided itself on offering customers the tools they need to be financially successful. In the case of mobile devices like smartphones and tablets, we’ve taken it upon ourselves to launch a new, responsive website that really optimizes to whatever mobile device you’re on, which makes navigation much simpler for our customers.”
The issue with many websites is that they’re optimized to be viewed on a PC screen, not on the smaller screen of a mobile device, but PeoplesBank has customized its website to be easily readable and navigable on any device.
“Whether they have a smartphone or tablet or desktop, they’re able to see all the information they need to see in order to make the transaction — do online banking, view products, view rates,” Kiddy explained. “No longer do customers have to pinch and zoom on mobile devices. Our customers are now able to receive accurate online information and view it on their mobile devices.”
She cited a report at mashable.com suggesting that many mobile users would rather use their browsers than an app, so providing both makes sense. “We’ve now optimized our website and app to cover all customer bases.”
Klinakis agreed that many customers still want to use a browser, and the banktech.com report suggested that online banking on desktops isn’t going away anytime soon.
“Smartphones are predominately used for transactional or quick access, such as looking up restaurants, products, or transit information. A consumer is more likely to use a tablet or a desktop for more analysis-based activity,” Sharma said. “In terms of banking, one can think of transactions being completed through mobile devices, but budgets or financial planning will still be done on desktops, potentially to be replaced by tablets.”
Klinakis added that more mobile features could be in the works, including the ability for customers to snap a photo of a check and send the image to the bank to deposit it. “That’s one of the key things I hear everyone moving toward. In general, customers seem to like that feature.”
As for Florence, it’s relatively new mobile platform won’t stay ‘basic’ for long.
“We will continue to enhance it, to offer solutions that will allow for some bill payments and mobile alerts — account alerts you set up yourself to deliver to your cell phone,” said Lynch. “You’ll eventually have the ability to deposit checks using the camera on your cell phone — what we refer to as ‘consumer deposit capture.’ That’s really kind of a next step. Big banks have been doing it for awhile. For us, we’re just trying to analyze risks and costs, and we’ll more than likely have more solutions soon.”

Rolling It Out
With only a few months under its figurative belt, Florence’s suite of mobile services are being used by only some 5% of customers, and the bank has tried to roll it out quietly as it evaluates user response and gauges what needs to be done next. But if the accounts of other banks hold true, the user rate won’t remain in the single digits for long.
“It really goes hand in hand with smartphone adoption, which isn’t surprising,” Lynch said. “If people are comfortable with a smartphone, they’ll want to get their banking done as well.”

Joseph Bednar can be reached at [email protected]

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