CAMBRIDGE, Mass. — Despite the headlines, mobile banking may not be ready for primetime just yet.
According to Catherine Graeber at Forrester Research, the hype surrounding mobile banking sounds much like the excitement surrounding financial aggregation a few years ago. She advises not quickly jumping on the mobile services bandwagon espoused by cellular phone vendors and carriers.
"We hate to rain on this parade, but here's the reality: Today's consumers still aren't very interested in mobile banking," Graeber says in a new report.
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"Before putting a mobile offering at the head of the development queue, e-business banking execs should sit patiently on the sidelines and wait to see if the early leaders succeed in growing adoption and delivering solid ROI."
Graeber's sentiments may be surprising, especially considering the boom of the cell phone industry. Wireless phone adoption rates are up 58% since 2000; a whopping 90 million U.S. callers now do so wirelessly. These numbers are only expected to climb in subsequent years. Forrester predicts that by 2012, 88% of U.S. households — or 121 million — will own mobile phones.
Subscriber success, however, has not translated to the banking arena. Early mobile devices struggled with uniformity in interface and functionality. Ditto on speed, where short message service text messaging trumps a still-slow wireless Web. Finally, less than half of current mobile devices even feature a Web browser.
General consumer opinion reflects these sentiments. Forrester finds that even among online bankers, only 5% of mobile users possess any interest of checking their finances via their cell phones. A whopping 72% in the same survey said they were not at all interested.
"Even the [online banking] adoption sweet spot, Gen Y text message junkies," Graeber argues, "isn't very interested. Mobile adoption will be slow over the next two to three years."
Still, all hope is not lost within the mobile banking arena, even among credit unions already offering this functionality. Adoption struggles, offers Graeber, may simply be a matter of consumer ignorance.
"If consumers don't know if they even have a Web browser in their mobile phone, he won't have a clue about how to access their financial through a mobile device."
These educational efforts, says Graeber, are best suited for Gen-Yers, the age group (16-26) already most mobile-addicted plus most likely to take the plunge technologically. Similar financial prudence is needed to determine the elusive return on investment for mobile solutions. How much will wireless alerts cut down on service calls? Can mobile account access increase debit card usage among credit union members?
Credit unions ready to take the plunge into mobile banking waters, Graeber says, might want to wait a bit longer. Instead, she suggests branch technology should focus on researching vendors and existing projects, such as online banking, with proven ROI.
"Let the big banks educate the consumer, and if and when mobile adoption takes off, you can jump in with your offering," she says.
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