If You’re Not Mobile, You’re Not Banking

March 26, 2014 at 7:04 am Leave a comment

One of my favorite surveys (yes these are the type of things I look forward to) is the Federal Reserve’s Annual Survey of the use of mobile and smart phones (those that are internet-enabled) to perform banking services. Since the survey is done by the Fed it isn’t biased towards a specific set of products and since the survey has been conducted since 2011 it’s providing an increasingly contextual snapshot of where banking is headed.

Among the key findings this year: 33 percent of all mobile phone owners used their phone to do banking in the last year; a 5% increase over last year.

Consistent with a slew of other reports on the subject the Fed researchers conclude that the relatively high prevalence of mobile phone and smart phone use among younger generations, minorities and those with relatively low incomes makes mobile phones a potential platform for reaching the unbanked and under-banked.

People are increasingly comfortable using their phones to transfer funds and check balances but are still a little uneasy about using the phones to make payments. Only 17% of mobile phone users report that they made a mobile payment in the past two months, up only slightly from last year’s 15%. The Fed concludes that a key reason for the sluggish growth of mobile payments is security concerns: “[a] significant share of consumers believe the technology to be unsafe or don’t know how safe it is for protecting their personal financial information.”

If you combine the Fed’s findings with another recent survey indicating that branch use continues to decline, the survey confirms yet again that the future is now when it comes to positioning your credit union to provide the services that the next generation of consumers and ensuring it is delivered the way they want.

To paraphrase a speaker at last year’s CUANY convention: If you had to choose between closing down a branch or ending your mobile banking services, which would you choose? Those of you who would choose to close down the mobile banking services, or worse yet those of you who don’t see the need to offer such services, are whistling past the proverbial graveyard.

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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