Banks, Credit Unions, and the Ongoing Mobile Push

It pretty much goes without saying these days that mobile has fundamentally changed the nature of a wide array of businesses. Retail shopping, gas stations, parking lots…many businesses have felt the effects of mobile. Banks and credit unions, meanwhile, are starting to feel these effects as well, with some offerings going completely online or completely mobile. But are the brick-and-mortar banks adjusting to mobile? Some new reports suggest there’s a clear lag between expectation and offering.

A combination of still-growing smartphone adoption rates—consumers in the over-55 age group are seeing a compound annual growth rate (CAGR) of almost eight percent while 18 – 34 year olds are pulling just two percent—and expanding options for mobile devices like virtual reality (VR) and augmented reality (AR) capability are still shaking up the market that some might have thought resolved.

Users are also increasingly branching out in terms of commonly-available phone applications. Ninety-one percent of users, for example, used text messaging on their phones, while 86 percent used voice calls. Email was the weapon of choice for 81 percent, while social messaging stepped in at 72 percent. Even video calling accounted for almost a third at 30 percent. Interestingly, voice calling had been on a four-year decline until this recent study turned that figure around.

What’s more, the use of mobile in payments is on the rise. A Deloitte study found that those who made a mobile payment with a smartphone or other device hit 29 percent of respondents in 2017, up 50 percent from 2016. A similar increase was seen in the numbers who used mobile payments weekly.

All of this taken together means that banks and credit unions—indeed, anyone who does business with the public—needs to make some significant adjustments in operations. People’s expectations are wildly different from what they were even five years ago, and those who fail to move to accommodate such changes are likely to suffer reduced market share and potential outright bankruptcy.

While banks and credit unions have made some strides in this area, it’s clear that the pace of progress has been slow. The risk-averse nature of banks and credit unions contributes on this front substantially, but the nature of the market will require even risky change.