COURTNEY ELIZABETH CLEVELAND: A Study on How Mobile Banking Has Impacted the Banking Industry: Improved Bank Performance by Mobile Banking. Under the direction of Ken Cyree). I explore the evolution of mobile banking within the banking industry and how it has influenced change. In the example of this thesis, mobile banking includes online websites, mobile applications and SMS banking channels.
The time frame from the introduction of mobile banking and its subsequent growth to the present time or as data is available is the evaluation period. I also briefly explore the key influences or factors on mobile banking and their impact. Bank research and surveys provide valid and current data on the past trends and performance of mobile banking.
All the references in this article have been of great value and have led to my own conclusions about mobile banking and the role it plays in the industry today. The Federal Reserve has conducted research on mobile banking that has been helpful in understanding the trends occurring in this sector.
History of Mobile Banking
Mobile Banking versus Mobile Payments
Change in Technology
Source: Innova Global Technology Inc. 2016) [The chart shows a representation of bandwidth growth over the past 25 years.] 25 Years of Bandwidth. Retrieved from http://www.innovaglobal.com/cat-3-cat5-cat-5e-cat-5e-cat-6-cat-7-copper-fiber-optic-cable-infrastructure-installation. Some banks have started making their own apps from scratch, which is now the more common trend.
For example, checking account balance, finding nearby ATMs/branches, or transferring funds can be done in one application and more sophisticated services such as personal financial management. Finally, the services merged into one user-friendly app to save customers from "mobile fatigue". It is also important to note another advancement in the industry and that is the evolution of personal computer programs in the Windows technology and further to the development of mobile device applications (apps) (Johnson, 2011). This is reflected in Table 2, the mobile banking overview by ida Mobile in the June 14, 2012 presentation given by Lorenzo Bolognini.
The figure shows the four main types of technology behind mobile banking.] A brief history of mobile banking. Regardless of the type of mobile technology (i.e. Android, Apple, etc.), consumer demand for apps or app usage has grown exponentially. The functionality of these applications has become more and more user-friendly, while the depths of services have been extended across all industries.
Specifically for banking, these apps brought the full range of physical banking to mobile devices. It should be noted from this chart that banking institutions have benefited from the explosion of application development by independent and corporate developers. I argue that the growth of data transfer technology, mobile devices and app development has been key to the growth of mobile banking.
Growth in Users
Growth in Smart Phones
A study from Javelin Strategy & Research, cited by Maria Aspan, says that mobile banking customers "do not tend to be younger and wealthier than the typical consumer".
Current State of Mobile Banking
Bank executives and their analytical talent pool must use unconventional skills in tracking technology changes to ensure their bottom line is sound. Once upon a time, the balance sheet, 10k, and annual report really focused on portfolio risk.
Customer Concerns
The table shows what technology banks are spending money on in descending order of percentage of money.] Where are the banks. The second most common reason listed for resistance to mobile banking adoption is that customers are not aware of the services being offered. Marketing for mobile banking was initially done mainly through in-branch advertising and banner ads on bank websites.
The paradox of these efforts is that the channels used to advertise mobile banking are the very channels that banks want to move customers away from in order to grow the mobile channel. Social media is already a mobile phenomenon and many social media users are eagerly opening up to mobile banking to meet their banking needs.
Profit and Revenue Growth Opportunities
Retrieved April 20, 2016, from https://www.javelinstrategy.com/coverage-area/leveraging-omnichannel- approach-drive-15b-mobile-banking-cost-savings. By converting deposit services to a mobile channel, banks are able to realize the savings of fewer deposits in branches. Since 2010, branch visits have dropped dramatically by 10 percentage points, while mobile banking has grown by the same amount” (Monahan, 2013).
Bank of America also linked the year-over-year growth in mobile banking, 31% in 2013, to the closure of their branches (Aspan, 2013). Research conducted by Ram Acharya, Albert Kagan and Srinivasa Rao Lingam proved that by providing an additional channel for online banking, community banks. DeYoung examined small commercial banks that offer online banking and their financial performance as a result.
That is, the added convenience of transactional Internet banking has led some bank depositors to purchase additional fee-based services and/or to voluntarily pay more for services they previously purchased at bank branches" (DeYoung , 2007). A paper published in 2012 examined the relationship between investments in self-service technology, particularly ATMs, and the financial performance of companies. In conclusion, Hunga states that “in addition to ATMs, the banking industry uses several types of self-service technologies to provide its services, such as telephone banking, internet banking, and mobile banking.
The effects of these alternative SSTs and their interacting effects remain unknown and deserve further investigation" (Hung, 2012). The research methods used by these researchers would be an excellent platform to effectively measure improved performance resulting from mobile banking.
Top-Performing Banks in the Nation in Mobile Banking
Citibank smartwatch compatibility and the ability to view your account balance without logging in via the Citi Mobile snapshot tool.
Performance Review over Time Period of Top Banks
Risks & Recommendations
This area is one of the most crucial areas to invest in for the success of the firm.
Opinion and Conclusion
I believe that banks will make progress in reducing costs over the next five years due to the fact that mobile banking requires them to be more sophisticated thinkers and more flexible in making the changes needed in the services offered and the required safety. Mobile banking will have to become the most important or most used channel for banks to actually reduce physical costs. Given the migration to mobile banking and the demand for new features, I suggest that having an attractive mobile banking product offering will keep the bank in the market.
Until then, I will maintain my primary view that mobile banking is a required channel. Retrieved from http://www.americanbanker.com/news/bank- technology/banks-to-spend-more-on-tech-in-2016-especially-security html. Retrieved from https://www.accenture.com/us-. en/~/media/Accenture/Conversion-Assets/Microsites/Documents17/Accenture- 2015-North-America-Consumer-Banking-Survey.pdf.
The bar chart shows the growth in mobile banking usage by US adults https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=8&v ed=0ahUKEwjAoL78qczMAhWHMyYKHYGGBKEQFghJMAc&url=https%3A%. A brief history of mobile banking. http://pt.slideshare.net/lbologini/mobile-money The graph shows bandwidth growth over the past 25 years.] 25 years of bandwidth. Retrieved March 8, 2016, from http://thefinancialbrand.com/53431/global-mobile-banking-use-study/. Simply offering Mobile Banking is not enough.
Leveraging a multi-channel approach to deliver $1.5 billion in mobile banking cost savings. https://www.javelinstrategy.com/coverage-area/leveraging-omnichannel-approach-drive-15b-mobile-banking-cost-savings. MOBILE BANKING: BACKGROUND, SERVICES AND ADOPTION. http://www.academia.edu/3334874/MOBILE_BANKING_BACKGROUND_SE RVICES_AND_ADOPTION.
