The rise of smartphone usage has increased consumer adoption of mobile banking, with 35% managing finances on mobile devices. Banks must adapt their operational models and form strategic partnerships to effectively leverage mobile banking and meet customer needs, as 39% of consumers cite mobile offerings as crucial for switching banks. Failure to do so risks losing customers to non-financial tech companies, making it essential for banks to view mobile banking as a strategic relationship-building tool rather than just a transactional channel.

1. How Banks Can Leverage Mobile Banking?
The mass consumerization of IT and the rising number of Smartphone users in the U.S.
has spurred consumer adoption of mobile banking. Consumers want to access financial
information on the go, wherever they are and mobile banking has become a
fundamental service. A recent Google survey found that 35 percent of consumers
manage their finances on a Smartphone or a tablet.
Mobile banking can be a competitive advantage. According to AlixPartners, 39 percent
of consumers say a mobile offering is an important consideration when switching banks
and estimates that 50 percent of U.S. consumers will use mobile banking services by
2016. Mobile banking represents tremendous opportunities that can drive considerable
new revenues for banks. The million-dollar question becomes: Are banks effectively
leveraging the mobile banking channel?
The answer is likely ‘no.’ Banks need to change their operational models to reduce their
costs related to mobile banking and provide customers with alternate, user-friendly and
secure payment and banking channels for their financial needs. Banks must embrace
mobile banking as more than checking account balances, transferring funds, or making
payments.
As banks slowly and gradually move away from traditional brick and mortar branches as
the main focal point of the customer relationship, it’s doubtful that retail and
c0mmercial banks have yet made the needed IT investments to improve their mobile
banking channels. Banks should form strategic partnerships with technology providers
and mobile networks to help them analyze customer data to understand niche customer
needs and thus provide customers with customized solutions and services such as
location-based applications, mobile payment apps, loyalty schemes, and the like.
Otherwise, banks risk losing customers to non-financial players such as Google, PayPal,
and others.
Thus, mobile banking presents enormous potential for banks. To leverage the mobile
channel, banks must view mobile banking as not just another channel to reach out to
customers but as part of a strategy to deepen relationships with existing customers and
penetrate new customer segments that are hungry for innovative banking services.