WASHINGTON — Mobile banking will save you money. And it will make you money.
Those are the two top-line messages from an opening day BAI Retail Delivery session at the Washington Convention Center on Tuesday with Zions Bancorporation senior vice president Matthew Wilcox and Drew Sievers, CEO of mFoundry, a mobile banking apps developer.
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Wilcox and Sievers told a packed room that of course mobile banking is the must have in financial services today, “but it’s no longer good enough to just save an institution money. It also has to drive revenue,” said Sievers.
Sievers delivered a slice of bad news: “You can’t expect to make money from mobile payments anytime soon.” Too many muscular players – wireless carriers, payments processors, non-banks such as PayPal – are circling the wagons and brawling over the scant few percentage points of revenue in play there.
But there is plenty of good news and one sliver is that “mobile banking is the lowest-cost channel in banking history,” said Wilcox, who said the average in-branch interaction with a teller cost his institution $4. The cost per mobile banking transaction: 8 cents.
Mobile banking customers also are profitable. At Utah-based Zions, those who use mobile plus online banking generate $450 each in annual profits. Online banking-only customers generate $350 each.
Mobile banking customers also are stickier. Their attrition is 1.5% per year, versus 4% for online banking only customers, said Wilcox.
That set the stage for California-based Sievers’ pitch where he outlined a new dawn in mobile banking apps where users will be offered a panoply of upsell opportunities inside the apps, everything from impulse buys of credit reports through higher fees for expedited payments, gift cards, and possibly retail services built around barcodes.
With every new form transaction, Sievers envisions the cash register ringing and, he suggested, revenues could very quickly become sizable.
“Mobile banking will bring new revenue to the institutions that look for it,” he said.
