Last weekend, I got a haircut. After the hairdresser whipped off the smock and I was admiring my new look, I went to grab my debit card to pay for the service. She said, rather uncomfortably: ‘I’m sorry, we don’t take cards.’
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What could have been an awkward encounter was saved by one thing: mobile banking. Thanks to modern developments, I was able to access my accounts via an app on my smartphone and transfer the funds directly in their account. No harm, no foul. But, as many of us will remember, it wasn’t always like this – this phenomenon is relatively new, so let’s familiarise ourselves with its rise to popularity.
It all began in the 90s…
Mobile banking has actually been around longer than most would think. The earliest mobile banking services date back to 1999 through SMS, giving banks the ability to text information to their customers like monthly account balance reporting, successful payment of a cheque into the account or insufficient funds notice.
But with the rise of the smartphone with WAP (Wireless Application Protocol) that enabled users to access the Internet, it allowed for banks to interact with their customers more online rather than via messages.
…And quickly grew from there
Because of its quick and easy convenience, there’s been a steady and consistent increase in mobile banking users. Carlisle & Gallagher Consulting Group conducted a survey to gauge modern mobile banking habits, and they found that 55% of Americans are already accessing their funds on their smartphones 2-3 times a week. In fact, it’s predicted that more than 50% of mobile phone owners will use mobile banking by next year.
And of these mobile banking users, millennials – those born between 1980 and 1994 – are slowly becoming the most powerful customer demographic. This group prefers mobile accessibility, and according to a recent FICO report, 52% of millennials are already using or would consider using non-traditional payment companies.
Keeping safe on the go
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Aside from the practicality and accessibility of mobile banking, it can actually help protect you against theft. Although some people are wary about valuable information about their finances being available on a smartphone, it has its advantages. One way that mobile banking can prevent fraudulent charges is by soft-carding, a technique that allows users to temporarily disable a debit or credit card from their smartphone. Once the bank has notified you of a suspicious charge, you don’t have to visit the bank or wait for ages on hold to someone in customer service to stop the thief.
Banks need to keep up with digital growth
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Digital banking has come a long way since its introduction, but there’s still room for improvement. Last year there were more mobile banking logins than online logins, and yet most banks haven’t implemented anything beyond the bare basics of mobile banking such as bill pay and checking account applications. Misys, a financial software provider, advises that in order to provide the best mobile experience, banks need to think about their customer experience, like when to send push and pull notifications for maximum impact. It’s all about providing a convenient and hassle-free experience for your customers not only so they will stay with your service, but so they will achieve better financial peace of mind.