The whispered word among insiders is that online banking usage is flat-lining – it has peaked and it may even be losing users. The big winner: mobile.

But few credit unions are prepared to jump on this trend by offering compelling, user-friendly apps. This train is leaving the station, who's on board?

Understand this: online banking is the Baltimore Ravens of financial services. The acclaimed champ, a fact made vivid in an American Bankers Association survey that found online banking stomping every other customer contact format in terms of user preference.

The ABA numbers:

* Online banking was the method “most used” by 39% of customers;
* Branches nabbed 18% (down from 25% the year before)
* ATMs won 12% of the vote (down from 15%).

Bringing up the rear – literally in last place in the ABA survey – was mobile with 6%. But note: that number represented a doubling from the year prior numbers.

And at least some experts now are claiming that mobile banking is the channel to watch.

Going forward, “we simply will not see continued dramatic growth in online banking usage,” said futurist Brett King in an interview. “Growth will come in mobile banking which is growing 300% faster than online banking did. Take-up is very fast.”

With King's Moven – a new style bank he is seeking to launch – “we built the mobile app first, before we built online banking.”

The advantage of that mobile first strategy, he said, is that “rather than take an online design and seek to push it onto a small screen mobile device – which is what most banks do – we did the opposite.”

As for why King is so bullish on mobile, he explained: “Mobile gives us context-based information that makes it different from online.” That is: the mobile device knows where the user is and that means, when mobile is done right, it can offer highly targeted information that just is not presently possible in the online channel.

King added, “The utility of mobile is massively higher and most [credit unions] don't realize this

By 2017 most people will consider their phone their banking account. Now it is a debit card.”

Another reason to think home banking has peaked: It dates back to 1994 when Stanford Federal Credit Union introduced the first Web-based version –- meaning this technology is pushing 20 years of age. Just about everybody who wants it, knows about it.

Worse still: “With many financial institutions, what they offer in online banking is a legacy experience that was late updated in the late 1990s,” said Mike Stern, who heads the finance sector team at mobile development company Xtreme Labs.

Many online banking websites are clunky, awkwardly designed, and unresponsive to consumer needs.

Stern, by the way, envisions innovations in mobile design backtracking into redesigned online banking portals which, he thinks, increasingly will look more like what users now get on their smartphones.

Meantime, the number of mobile users is growing at a ferocious pace. There are an estimated 500 million today and that number is projected to hit 1 billion, according to Juniper Research.

Nobody thinks the number will be much lower than that, mainly because mobile has the potential to bring digital banks to many consumers who have neither a home computer nor broadband access. But they do have mobile phones that, increasingly, are smartphones and that makes them prime for adopting mobile banking.

One billion will be an easy number to hit – and online banking, meantime, is crawling upwards in number of users, mainly because just about everybody who wants to use it already is, and that certainly is true in the U.S.

Meantime, as the numbers of tablet owners skyrocket – research firm IDC estimated that 122 million tablets sold in 2012 and the number will hit 172 million in 2013 – and, said King, tablets are bringing a new, older consumer into the mobile fold. “Tablets have a highly usable interface,” said King, meaning the big screen and large on-screen keys may appeal to Baby Boomers who hitherto have scorned the cramped mobile phone form factor.

Add it up and online banking's day is indeed done. Mobile will rule and this coronation is coming fast.

Instant Insights /

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