Banks and Mobile Banking: Fish or Cut Bait!


As we say in the south, either fish or cut bait.

When it comes to mobile banking, banks had better get on board or start looking for a closed sign. In the last couple of months, I spoke at the Nebraska Bankers Association Marketing Conference and at the Wolters Kluwer Financial Services Users Summit.

I was shocked at the number of banks that said, “We’ll never offer mobile banking. It’s not secure and my customers don’t want it.”

Maybe that explains why research from Javelin Strategy & Research says that credit unions are outperforming community banks in mobile banking, with nine out of 10 credit unions offering web-based mobile banking!

They also found that three out of 10 community banks do not offer a single form of mobile banking.

Consumer mobile banking growth follows smartphone adoption, which is now at 52% and growing. Javelin research reported that mobile banking added 10 million more U.S. adults in the past year as smartphone usage surpassed feature phones and tablet adoption surged to 21%.

My generation didn’t grow up with computers, smartphones or texting, but I personally love “text” banking. I own multiple rental properties in a couple of states and have my tenants deposit their rent directly into my bank. I get text messages instantly showing when their deposits are made and the amount.

I can type in “BAL” to see my balances instantly and “LAST” to see all of my recent history including payments that I’ve made.

A recent PEW Research study found that text messages have doubled from 60 to 100 per day in the 14-17 year-old age group. I know most banks aren’t interested in this age group, but they need to be interested in what’s going on with this younger generation. Mobile banking is the future and the sooner banks embrace it, the better.

The Intuit Financial Services Financial Management Survey reveals how Generation Y banking customers (those born after 1980) differ in their banking habits from the rest of us. Half of 18-32 year-olds use their smartphones to check balances or make payments. That’s compared to 20% among the public at large.

Every company in America would love for Consumer Reports to endorse their products and services. So bankers, here’s what Consumer Reports says about yours.

“Mobile banking is convenient. Anytime-anywhere account access makes seat-of-the-pants money management possible. For example, you can review your account balances while waiting in a checkout line to see if you should use your credit or debt card for the purchase.

You can also transfer money between accounts, monitor availability of deposited funds, and pay bills. Your bank can send text alerts when your checking balance is low or when withdrawals and deposits are posted to your account. You can get alerts for debit and credit card purchases that exceed a set amount, which might indicate fraud.

The latest innovation, called “remote deposit capture,” in mobile-banking parlance, lets you snap a photo of a check with your cell-phone camera and “deposit” it into your account. You can’t get cash out of your cell phone yet, but you can use it to find the nearest ATM.”

Research from multiple companies shows that mobile phone usage is exploding. Half of our younger generation is using mobile banking and we have Consumer Reports telling everyone why they should be using it.

We have many very good companies in the banking industry that offer secure mobile banking applications to financial institutions. The only reason I can see why banks don’t embrace mobile banking is either that they are scared or they had rather cut bait!


Neal Reynolds has worked with hundreds of banks and credit unions around the country helping them to grow core deposits and market share without growing their marketing budgets. Contact him at