A growing number of community financial institutions are now offering mobile banking, despite continued concern over regulatory obstacles. According to a recent Independent Community Bankers of America study, 37 percent of community FIs currently offer mobile banking — more than twice as many as two years ago. Another 44 percent of community FIs plan to implement the service by 2014.
Excess regulation remains a top concern for community FIs looking to add mobile banking technology. More efficient and restrained regulation must be implemented in order for FIs to continue to offer the technologies their tech-savvy customers are coming to expect.
While complying with regulations is at the top of the list for many FIs, the survey concluded that it's of particular concern to FIs with assets below $100 million. Eighty-nine percent of the community FIs polled in the study listed regulatory compliance as a concern, compared with 65 percent of community FIs with more than $500 million in assets.
Along with regulatory compliance, community FIs also cited managing losses due to security breaches and controlling costs while continuing to invest in new technology as current obstacles.
Although consumer adoption of mobile banking has been slow to take off, recent research is helping FIs better understand how mobile banking customers use the technology.
A study by the Federal Reserve reports that 90 percent use mobile banking to check account balances or recent transactions, 42 percent use it to transfer money from one account to another and 21 percent use it to find the nearest ATM.
No matter how consumers use it, experts predict the popularity of mobile banking will continue to increase over the next four or five years. The American Bankers Association points out it took 20 years for ATMs to become mainstream, and a decade for online banking to do the same.
Another research report by Gartner projects global mobile transaction volume and value to average 42-percent annual growth between 2011 and 2016, and forecasts a market worth of $617 billion with 448 million users by 2016.
Those numbers are hard to ignore. As the ICBA study shows, more and more community FIs are taking these projections seriously. If you don't already have a mobile-banking platform in place at your FI, consider your options, and work to increase your preparedness to become a part of the mobile-banking movement.
Jim leads Shazam’s communication efforts by working directly with industry organizations, trade associations, and media outlets to affirm Shazam’s focus on representing the voice of community financial institutions in the electronic payments industry.