Mobile banking on the rise during recession

Suzanne Choney • E-mail

Banking by cell phone is growing in popularity, and the recession may be the reason behind it, experts say, as people "micromanage" their money more than ever before.

"The economic conditions and the way that we all pay a lot more attention to our money has caused a bit of an uptake in this service," says Charles Landry, VeriSign's general manager for products and innovation for the company's messaging and mobile media division.

"A lot of people certainly micromanage their money much more closely now than they did 24 months ago."

Avivah Litan, banking security expert for Gartner Research, said "almost every bank has a little R&D project going on with mobile banking. They're all experimenting with it." Some of those projects, she said, were "scaled back after the credit crisis hit, but now they're trying to pick them back up."

As those in the wireless industry meet this week in San Diego to talk about trends, mobile banking and finance will be among them. Apple's App Store, which has more than 85,000 programs available for its popular iPhone, lists several bank "apps" among its most popular finance programs, including those from Bank of America, Chase, Wells Fargo and Citibank.

"The cool thing about mobile banking that kind of trumps online (banking) is that it’s tetherless," said Mark Beccue, ABI Research senior analyst. "You don't have to be in front a computer to check your balance. And with the year we’ve had, people are really kind of eyeballing their personal finances more closely. Mobile banking takes it to the next step."

Citibank Citibank launched its iPhone mobile banking application last spring.

TowerGroup, a financial research company, projects that mobile banking users will quintuple in the next four years, going from 10 million active users this year to more than 53 million in 2013. It, too, cites consumers' ability to know their account balances anywhere and anytime as a key factor.

"As economic concerns prompt consumers to manage their finances more closely, their desire for real-time access to and control of their aggregated financial information is increasing the urgency for banks to create a mobile banking channel," TowerGroup said in a report.

A recent American Bankers Association survey found that for the first time, U.S. bank customers said they would rather visit their bank's Web site than the bank itself, with almost 25 percent of those surveyed preferring online banking.

Mobile banking did not have such an impressive number in the association's survey of 1,000 people; it was "preferred by 1 percent of consumers, primarily among 18- to 34-year-olds," according to the bankers' association, and barely registered a blip on the radar of those 35 and older.

Still, banks are "going to have to develop these (mobile) applications to keep 'digital natives' — young adults, 18- to 25-year-olds who grew up with computers and do everything from their phones — as customers," said Litan.

Most mobile banking programs perform some of the basics — letting you check your balance, deposits, withdrawals and transfer money to pay regular monthly bills, as well as providing a list of ATMs and bank branch addresses.

Smartphones — those with generally bigger display screens, Web access and e-mail — make mobile banking more appealing, but are not necessary in order to perform rudimentary banking tasks. In fact, most mobile banking is not done using such devices right now, said Beccue.

However, between 35 and 40 percent of U.S. wireless subscribers now have phones that have mobile Internet access, he said.

And text messaging — which does not require a Web browser — "is almost ubiquitous," he said. "Nearly every person with a cell phone can receive a text message."

ABI Research recently issued a "report card" for more than two dozen U.S. banks that do mobile banking, giving high marks to those that are "consumer-friendly" and easy to use.

Among the top-ranked banks: BB&T, Eastern Bank, Northeast Bank, USAA and Wells Fargo. Also scoring well were Bank of America, Chase, Capital One and US Bank.

MORE FROM CELL PHONES

Cell phones Section Front

Report: Google to sell its own phone Teen drivers ignore anti-texting laws AT&T: Tighter control of cell data usage ahead 10 iPhone apps for the holidays that sparkle Think your kid isn't ‘sexting’? Think again GPS cell phone apps challenge standalone devices Using phone while walking perilous for seniors Smartphone return, exchange policies for the holidays A third of teens say they’ve texted while driving Review: Motorola's Cliq is a social butterfly Cell phones Section Front   Add Cell phones headlines to your news reader: