The Timeframe For Mobile Moves
AUSTIN, Texas.-Credit unions looking to launch a mobile banking platform need to keep some numbers in mind: 12 to 24, and 2016.
The former, according to Matt Flake, president of Q2ebanking, is the timeframe in which CU leaders must make a decision on mobile banking. The latter is the year by which mobile banking will be a primary means by which members interact with their credit union. "If I'm a CEO of a credit union, I wouldn't want to take that risk" of having to play catch-up, said Flake. "I'd want to find a mobile solution in the next 12 to 24 months; you're making a decision now that's really about 2014, 2015 and 2016."
The risk, said Flake, is watching some of the best members migrate to other providers. Members, he said, can go "somewhere else to find a financial institution where they can do some of their business 'mobilely' as we become a more mobile world. I think that it is as critical as any piece of technology that a credit union has to consider today. I wouldn't rush out like some people did two or three years ago and buy the wrong type of technology; I'd put a strategy together and try to execute on that efficiently."
That long-term planning sentiment was echoed by a number of individuals at both CUs and service providers, including Fiserv's Mobile Solutions Product Manager Calvin Grimes, who called 2011 "a year of transition."
"Credit unions that don't have mobile products are not going to be seen as mainstream from a member perspective," he said. "They're going to be falling behind, not only among their peers within the credit union industry, but within the banking industry, as well."
A number of analysts pointed out CUs have generally been keeping pace with banks when adopting mobile solutions-and in some cases have even outpaced their rivals-and Grimes noted credit unions' member-centric nature makes them particularly well-positioned to launch a mobile platform that serves their specific member needs, such as those adopted by CUs with members in the technology and airline industries.
But those same analysts also noted that with mobile poised to leapfrog online banking in the near future, the most successful providers will be those that view mobile as its own independent entity.
Drew Hyatt, SVP at Mitek in San Diego, which provides mobile-imaging application services such as remote deposit capture, observed that financial institutions can essentially be divided into three segments: those that view mobile as a standalone channel; those that view mobile as an element that has yet to fully develop and is linked to online banking, and those taking a "wait and see" approach.
Right now, he said, only about 5% of credit unions classify for that first segment, with about 20% in the second segment and the remaining 70% taking a "wait-and-see" attitude. But he noted that the numbers change every three months, and that "with this industry and the change of technology that's happening so rapidly, I think that within 12 months, in the credit union space we're going to see something that looks more like 30/40/30."
Hyatt noted that online provider Digital Insight's studies on online banking that correlate to mobile, finding that "the most effective way to drive adoption is by getting your employees to use the technology, and I have a gut feeling that mobile is going to be the same way. If they get all the frontline and customer service employees using mobile technology ... and articulating that to the member base, I think that's the single best way of driving adoption."
Size and FOM make a difference, too. Some smaller credit unions don't have mobile capabilities yet, but they may not need them, noted Jim Hanisch, EVP at CO-OP Financial Services, Ontario, Calif. "I think at the end of the day," said Hanisch, "it comes down to 'What do you need to do to meet your members' needs?'"