AUSTIN, Texas-If your credit union is still taking a wait-and-see approach to mobile banking, you are in danger of missing the boat if you don't act quickly.
"The boat is getting pretty dang close to leaving the dock," said Brian Abele, SVP of product management at Q2ebanking. "It's really critical for credit unions to make sure they start jumping into this. Not only are we seeing that mobile is becoming more of a standard across the board for every institution, but we're starting to get to the next level of functionality and services-like mobile deposit capture-and once they're rolled out to members they're adapted very quickly and are some of the most engaging services for members."
For a time, many CUs felt they could get by with optimizing their online banking website for a mobile device rather than a dedicated app, but many analysts that spoke to Credit Union Journal said those days have passed.
It's about membership engagement, Abele said, and the realization that the credit union isn't the only one engaging with them. "Once the members really start to see what's going on around them and at other institutions and see the commercials on TV, they start asking questions about being able to add those additional services," he suggested.
Plus, said Mickey Goldwasser, Q2's VP of marketing, the demographics have changed. Mobile adoption initially was driven by younger consumers, but now "people from age 35 to in their fifties are steadily adopting these technologies." In other words, the same age demographic as the traditional CU member.
So what changed in the intervening years? For starters, increased adoption of smartphones, which have surpassed adoption of traditional phones and text-enabled phones, according to Steve Shaw, VP of strategic marketing for digital channels and electronic payments at Fiserv. Tablet usage has also grown, with those devices running along a faster adoption curve than smartphones, according to some analysts (see related story, page 14).
What's the first step for CUs that still haven't gone mobile? Daniel Simon, regional sales manager, mobile deposit, at Mitek Systems, said mobile remote deposit capture is the killer app that drives consumers to adopt an FI's mobile offering. Beyond that, it also saves money at the institutional level. Mitek estimates mobile remote deposit has saved FIs more than $100 million since its inception.
Good News For Holdouts
The good news for the holdouts is that because mobile has already been widely adopted, most vendors are able to help FIs bring a tailored solution to market with relatively quick lead-up time.
"An interesting phenomenon we're seeing is more and more mobile banking vendors are coming out and tailoring their offering to the smaller institution-among them credit unions-and making it a bit simpler to integrate a nice, full-function mobile banking app, so they can piggyback and bring on mobile deposit, which is the killer app driving that technology," said Mitek's Simon.
CUs that don't get in on mobile soon may also run the risk of being behind the curve on mobile wallet technology. Fiserv's Shaw pointed out that while mobile point-of-sale infrastructure is still being developed and the mobile wallet provider wars are far from over, all of those things may ultimately interact, and the CU's mobile app could serve as the spoke for those interactions.
"The idea is that a credit union has a mobile banking app, but within that app is the capability to interface with third-party wallets like PayPal or Google or Visa and MasterCard," he said. "If a consumer wants to use that, the credit union would use their mobile banking app and interface with an API that the wallet provider would have that enables the consumer to use the credit union app, but during check out use a Google Wallet if they so desire."
