Forty-five percent of adults in the U.S. will reportedly be using mobile banking in four years. Consumer adoption of mobile banking continues to skyrocket with an anticipated reach of 61 million U.S. consumers this year, according to Forrester Research. That's up from 47 million in 2012.
According to the Credit Union National Association’s Fees Report and National Member Survey Report, by 2017, nearly half of U.S. financial institution accountholders, or 108 million consumers, will be using mobile banking. And more than 35 percent of credit unions overall provided mobile banking services in 2012, twice as many as in 2010. Credit unions also typically offer this service free.
Lynda Milton, president and CEO of Team Financial FCU tells the LoneStar Leaguer that her board of directors approved on Saturday for the credit union to offer mobile banking to members. Milton says she hopes to roll it out this summer.
The Houston-based credit union has $5.9 million in assets and serves 1700 members. Milton hopes that by offering mobile banking they will be able to attract younger audience.
“Our membership is aging, therefore it’s imperative that we attract and retain a younger audience,” said Milton. “The younger generation does not want to visit a branch to do business. While they may not always have their computers with them, their cell phones are with them 24/7. They want to pay bills, shop, etc. with their cell phones.”
Milton says the credit union has also created an advisory group comprised of 17-25 year olds. This committee thus far has redesigned the membership brochure, created a video presentation highlighting the credit unions products and services, and is in the process of redesigning the website. Milton hopes that this engagement will inspire them go to on to serve on the board.
“Even though we are a small credit union we want to be accessible to our members,” said Milton “You only fail if you don’t try.”
Among credit unions with more than $100 million in assets, the adoption rate for mobile banking is even higher. Between 62 percent and 78 percent of these credit unions offer this service and the larger institutions that haven't added it yet plan to within the next year, according to CUNA research.
Texas Trust CU (Mansfield) tells LoneStar Leaguer readers that it rolled out mobile banking in July 2012. Earlier this month, it introduced mobile deposit. Jim Minge, president and CEO of the $748 million in assets credit union says it’s about convenience.
According to the credit union, the Texas Trust Mobile App allows members to access account information, check account balances, transfer money between accounts, view transaction history, and search for surcharge-free ATMs.
“Mobile deposit went live March 25,” says Minge. “It gives members the ability to deposit checks virtually from anywhere, anytime. Members endorse the check, snap a picture of the front and back of the check using the mobile phone, then submit for deposit. No need to visit a branch or ATM.”
The credit union currently has nearly 70 percent of its membership that utilizes mobile banking, including more than $166,000 in mobile deposits performed in March 2013.
CUNA data also shows that credit unions offering mobile banking report 10 percent of members sign up, on average. But 25 percent of credit unions experience penetration levels of 15 percent or more while just less than 10 percent of credit unions see penetration levels less than 5 percent.
Research suggests that member demand and mobile transaction volume will continue to increase. Of members who use mobile banking, 25 percent say they conducted more transactions this year than last year, and only a handful reported conducting fewer transactions.
By offering more ways to engage members in mobile banking, credit unions can boost penetration rates further. Many credit unions offer text message alert functionality (67 percent) and/or make downloadable applications available for their members (73 percent) so members can transfer funds, view account details, make payments, etc.
Experts anticipate mobile banking will follow the same track as online banking. This means it will serve primarily as an additional service delivery channel, rather than replace any existing channel.
Mobile banking in combination with online banking and other services will build stronger overall product loyalty. This makes it much less likely that members will consider moving their major accounts to a competitor.
Mobile/image deposit capture is a key "sticky" feature. Credit unions that add it to their mobile banking repertoire better position themselves to maintain current users and attract more.
Currently, 15 percent of credit unions with more than $50 million in assets already have this feature in place. And, nearly 50 percent plan to introduce it in the next year.
The percentage of credit unions that currently use remote deposit capture increases with asset size, reaching about 35 percent among credit unions with more than $500 million in assets.