Mobile Trend-Setting

It’s obviously inevitable that the dawn of a new year will produce a rash of predictions for the months ahead. It’s also obvious that many of these prognostications focus on mobile banking—after all, that’s where the action is right now (if we can skip the messy government settlement stuff). Still, that doesn’t mean we have any real idea what’s going to happen.

There’s certainly no question that this is the new battleground: Banks able to build on mobile innovation will reap the rewards of more engaged customers, higher market share and, ultimately, greater profits. And more than just competing against traditional rivals, they will be able to hold off online-only banking startups. That said, as with any advance, there might be a price to pay.

For example, increased mobile adoption in 2014 will take its toll on branch networks. There’s a new generation of consumers that has no real memory of traditional banking, which means the idea of actually stepping into a brick-and-mortar outlet seems quaint. For their part, financial institutions will market their services directly (and perhaps exclusively) to mobile-only customers.

Hand on mobile phone

Here’s one recent example of the effects of this trend: More than 140,000 customers of First Niagara, a community-oriented bank with some 420 branches in New York, Pennsylvania, Connecticut and Massachusetts—downloaded its mobile app in just the first year. Early in 2014, the bank announced an organizational restructuring that cuts 170 positions. Expect to see many more such stories in the next few months.

While things are busy on the consumer front, we could see even greater transformation on the business side. ‘The ath Power Small Business Banking Study,’ a new research initiative from ath Power Consulting, highlights a potentially worrisome divide between what the market appears to want, and what it’s actually getting. Fully two-thirds of the small business owners surveyed for the study say that they’re likely to switch banks in favor of better mobile options. However, some 37% of the bankers surveyed for the same research omitted to even mention their mobile offerings.

Isn’t it a little late in the day for mobile banking to not be on the forefront? In fact, one prediction for 2014 is that this is the year in which mobile banking will actually eclipse online banking, at least in users (within certain parameters, the number of transactions is already higher). That’s a remarkable advance for a capability that essentially didn’t exist just a few years ago. But with affordable smartphones now ubiquitous and 4G networks more widely available, the infrastructure certainly exists to speed the change.

The critical element here is that mobile isn’t really one thing anymore. For example, what we know as the camera dates back to 500 B.C., but putting one inside the phone now enables everything from Remote Deposit Capture to Picture Pay. This has had the effect of turning our business on its head, and it’s likely that we’re still in the nascent stages of this change—there are many more apps and capabilities still to come. Or consider digital wallets, particularly with aggressive marketing from institutions that see greater opportunities with this capability. Surely there will be discounts and other customer goodies, which in turn will affect the bottom line.

The more sobering reality is that these larger trends will only affect us as financial services institutions and professionals only to the extent that we are able to shape them. It’s not as if we’re just entering this brave new mobile world; we’ve been here for some time, and doing our part to develop new apps, adapt traditional offerings and empower customers. As always, we can identify emerging market needs and provide solutions to meet them.

However, the most successful companies are those than function ahead of the curve. They create technology and service solutions to problems that don’t exist, and in the process provide transformative capabilities to their customers. We can look ahead to 2014 and see what trends are coming down the pike. But we can also help drive those trends ourselves.

*Image courtesy of  twobee FreeDigitalPhotos.net

What We’re Reading: Holiday Edition!

Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom.

  • If Economists Wrote Christmas Cards

The Atlantic

Cash is the most efficient gift, according to economists. Cash is also a terrible gift, according to economists. By guaranteeing that the recipient can buy exactly what she wants, you guarantee that the recipient will consider you an unemotional robot. That’s why the vast majority of economists in the University of Chicago’s IGM poll said it’s absurd to give cash to loved ones for the holidays. “In some cases,” Steven Kaplan said, in a stirring defense for thoughtful gifts, “non-pecuniary [not cash-related] values are important.”

Read more 

  • 2014 Top 10 Retail Banking Trends and Predictions

Bank Marketing Strategy

This year’s list run the gamut from a continuation of past trends to the introduction of new trends in delivery, payments, competition, operations, customer experience and marketing. Prioritization of response to these trends will differ for each bank, credit union and industry provider, but none of these trends can be ignored.

Read more 

  • Is 2014 the Year of Mobile Banking?

Bank Systems and Technology

Here are the top three predictions on what to expect in mobile banking 2014. Mobile Deposit Will Move Beyond the Consumer to Commercial. Photo Bill Pay Adoption Wiill Be Steeper and Faster than Mobile Deposit. Mobile Banking Adoption Will Catch Up to Smart Phone Adoption.   It is looking like 2014 will be the year that the human element of mobile banking finally catches up with the technology.

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  • 4 New Year’s Resolutions for Your Bank Accounts

FOX Business

Here are four things you should do in the new year to get your banking situation into better shape: 1. Optimize your checking/saving balance. 2. Move deposits longer — with caution.  3. Consider a shorter-term mortgage.  4. Re-prioritize your banking needs

Read more 

  •  IRS Reveals How Long 2014 Tax Filing Season Will Be Delayed

My Bank Tracker

A couple of months ago My Bank Tracker informed us that the government shutdown would delay the 2014 tax season, and that the actual length of the delay would be announced at a later date. The IRS announced yesterday that processing for the 2014 tax-filing season would be delayed until Jan. 31.

Read more 

  • 3 ways banks will try to win you back in 2014

Yahoo! Finance

Here are just a few ways banking will get a lot sweeter in 2014: 1. They’re bringing the bank teller to you: Bank of America (BAC) raised eyebrows when it rolled out 150 teller-assisted ATM machines earlier this year, and we can expect to see more banks follow suit. Expect perks on perks on perks: Consumers, no matter the size of their checking accounts, can expect more “star” treatment from banks in 2014.  Banks will take on the classroom: In 2014, you can bet big banks will continue their uphill battle to redeem themselves by focusing on consumer education.

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2011: The Year of Personal Finance Management Tools

Mark Schwanhausser of Javelin Strategy and Research recently predicted that 2011 will be a banner year for personal finance management (PFM) tools. Schwanhausser notes that the ideal PFM tools will be integrated from bank log-in and give users an overview of outside accounts.

He writes:

“Bringing PFM out of the shadows of a tab will require a new type of thinking at most FIs. The payoff is that FIs have an opportunity to change not only how customers think about their money but also to expand the role of the FI as their primary financial portal. Currently, FIs focus the online experience on accounts and balances. But smart PFM can expand the “conversation” to touch on bill pay, transfers, financial alerts, spending categorization, financial goals and more – all from the log-in.”

Do you offer PFM tools? If so, where are these tools located on your Website? Let us know in the comments section below.