Just when many credit unions are catching up with member demands for mobile phone banking, yet another strong trend is emerging among consumers: tablet banking.

By the end of this year, nearly 120 million Americans will be tapping their tablets, and they'll be expecting their financial institutions to offer an app, according to industry data.

Read more in the Focus Report on Online & Mobile Banking:

While credit unions may be tempted to think tablet banking is identical to other technology channels like their website and mobile phone, industry and credit union executives say the tablet channel is different in that it can open a good opportunity to retain members and appeal to prospective young members.

So just how popular are tablets becoming?

Consider this: In June 2012, 74 million U.S. consumers or 31% of the Internet population were using tablets. By the end of the year, nearly 120 million or 47% or of the Internet population will be tapping on a tablet, according to research firm Frank N. Magid Associates in Minneapolis.

What's more, Fiserv's 2012 Consumer Trends Survey showed almost half of tablet owners have used their devices to access their financial institution's online banking services. Almost two-thirds of those yet to access online banking from their tablets plan to do so in the future.

By the end of this year, Austin, Texas-based Malauzi Software estimates one in four credit unions with assets of $50 million to $15 billion will offer an iPad app. Last year, about 10% of credit unions launched an iPad app, and a few began offer it in 2011, the firm noted.

At the $304 million McGraw-Hill Federal Credit Union in East Windsor, N.J., more than 700 members have signed up for the iPad app launched in July. President/CEO Shawn Gilfedder expects that number to keep rising as much as its smartphone apps have taken off. The credit union's iPhone app users increased to 2,000 in February, up from 1,100 in February 2012. Its Droid phone app users have jumped from 405 in February 2012 to 983 in February 2013.

McGraw-Hill FCU has seen a 7% decrease in online banking, which includes desktop and laptop, usage among members, though its tablet banking usage has increased by 7%. Gilfedder believes the two numbers are related.

“I think it's an interesting dynamic,” Gilfedder observed. “Our membership is recognizing that if they can do everything they need to do on the tablet because it's very easy and very convenient, then why do they even need to go to a laptop or a desktop?”

Credit unions like McGraw-Hill FCU know it's crucial to understand how members are using their computerized slates in order to improve mobile banking technology that will earn members' loyalty and attract attention of prospective members.

“You really need to think about the unique characteristics of the tablet,” said Bradley Scott, Fiserv's director of mobile solutions. “You just can't take what you have on your mobile phone and apply it to your tablet, nor can you take what you know from website design and apply it to tablet. It's got to be treated differently.”

Unlike the laptop, the tablet is lighter and more portable with a large-enough screen, making it easier to read and navigate than a small smartphone screen. Instead of using a laptop keyboard or mouse to access sites, people use their fingers to tap, swipe, slide or pinch through their websites. That sense of touch somehow makes the overall tablet experience more engaging, interpersonal, and playful than a laptop or even a mobile phone, Scott said.

In addition to the tactile navigation advantages of a tablet, Fiserv's consumer research finds credit unions should leverage the tablet's screen to present financial information through interactive graphics and interactive tools such as calendars and calculators that can help engage members.

The $148 million River City Federal Credit Union in San Antonio said it launched its iPad app at the end of February as part of its new strategy to retain and attract young members in the 18–34 year-old demographic group.

River City's iPad screen creates a different look when members tap on its app to access their financial information, said Eve Hernandez, marketing and business development vice president for River City. But to create a consistent member experience, the iPad site retains the same data and design elements that are used across all of the credit union's technology channels.

Hernandez sai d she was happy with the professional guidance received from technology partner, Malauzai, which advised the credit union to make the most of the iPad's screen space and its visual appeal to engage members.

For instance, River City shows a listing of its branches on its smartphone app. But on its iPad app, the branches are displayed in a colorful carousel graphic that allows members to rotate through the different images of each branch with maps, directions and other information.

Other eye-appealing and interactive graphical elements on iPad include presenting pending payment transactions on a calendar and displaying account balances on scrolling tiles, Hernandez said. On iPhone, pending payment transactions and account balances are presented in a simple though utilitarian list.

Another apparent advantage of tablet banking is that consumers are spending more time on a financial institution's site and logging in with their iPad as much as their iPhones. That means members are more likely to see marketing messages, said Robb Gaynor, chief product officer at Malauzai.

Gaynor said iPad users are spending close to two minutes on a financial institution site and about one minute and 20 seconds from their banking mobile phone app. In addition, Malauzai also found members are logging onto to their iPad credit union app about three times a week, which is about the same for the iPhone app.

Malauzai's iPad app enables credit unions to feature pre-login marketing messages and post login marketing message after members log in to their accounts.

“The tactical reality is that our most effective marketing is pre-login, not post login,” explained Gaynor.

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