Mobile Banking Continued Steady Growth in July
Consumers' use of mobile banking apps continued to grow at roughly the same rate in July as the previous month, resulting in a reading for American Banker's Mobile Banking Intensity Index of 71.8.
The biggest change during the month was in mobile check deposit: the index value for the average transaction value of checks deposited via mobile device dropped more than 10 points. However, check sizes are still growing, just not quite as much as they were in June. In July, 52% of bankers said the average value of checks deposited by consumers using a smartphone camera was higher than in in June. Almost half (47%) said the average value was about the same; less than 1% said these checks had gotten smaller.
The volume of checks deposited via mobile device increased at an extremely high composite index rate of 82, though this was a 5.5% drop in index value from June. The majority 64% of bankers reported a higher volume of retail mobile check deposits in July than in June. About a third (35%) said volume was the same both months.
The index is a product of American Banker's regular surveys of banking executives and is published in partnership with Verizon. The MBII is a diffusion index. For context, readings above 50 in a diffusion index indicate expansion and readings below 50 point to contraction. The further from 50 a reading is, the stronger the indicated change. A reading of 50 suggests that activity was unchanged month to month. All the data in the index is compiled from a survey of 289 bank executives, all from institutions that offer mobile banking. The index values are calculated based on respondents' answers to questions about customer activity in certain aspects of mobile banking, such as checking account balances, transferring money between accounts and paying bills.
Surprisingly, considering the overall maturity of mobile banking applications, consumer downloads of mobile banking apps continued to grow in July; the index value for this activity rose 3% in July, from 76.9 to 79.9. Some bankers noted that they had only recently rolled out native apps, so naturally adoption is still ramping up. "Check image capture was added in June," one commented. "Mobile banking at this bank was first available in fall 2012 so we are still in growth phase," another wrote. "Mobile banking is fairly new at our institution. Many new members are currently signing up," said a third.
The use of text alerts accelerated more slowly in July than in June, with an index value of 71.8 versus 74.4. Still, close to half (47%) of the bankers surveyed said the volume of text alerts grew in July and half (49%) said it was the same as the previous month. "Text alerts seem to be trending stable or decreasing, as it appears many of these customers are migrating to browser-based or mobile apps instead," one survey respondent wrote. However, another said balance alerts are the bank's most popular mobile service.
On a darker note, the index value rose for mobile app downtime in July, to 57.5 from 53.6 in June. A couple of respondents noted power outages and planned downtime for maintenance. "Our provider had a hiccup in their service," one wrote. "We were down for several hours while they fixed it." Several bankers mentioned planned downtime "We are still rolling out mobile banking and had significant down-time for testing a modification to the app," one respondent wrote. "We had many more software upgrades and changes in July," said one banker. Another expressed a bit of frustration: "Our vendor had an inordinate amount of downtime last month."
This month, a few of the surveyed bankers acknowledged that they have trouble obtaining precise numbers on certain aspects of mobile banking activity. "Our mobile banking app works well, however, the reporting we receive is not all inclusive," one wrote. "We wish we could receive better reporting from our provider."