>Mobile Banking Ready to Takeoff, Gen Y On Board?

This entry was posted by Wednesday, 16 April, 2008
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>A blurb in the latest CU360 Executive Newsletter caught my eye the other day. It states that cell phone banking is on the verge of catching on. The article attributes this to information from BAI’s Banking Strategies that says improved technology and a surge in cell phone ownership have created fertile soil for mobile banking to grow.

Of course, to really make mobile banking (or “credit unioning”) takeoff is to make it more than just a way to check your balance. The key, according to the CU360 article, is to make payment transactions part of the package. Adding this functionality makes it incredibly convenient for the user to buy something or pay any bill on the fly with a few taps on their keypad… just as people use their desktop to pay their utility bill or purchase that toaster oven/MP3 player combo they’ve always wanted.

This is an important point, especially for us Gen Y folks. According to Forrester Research, we Gen Y’ers are mobile phone junkies AND have no qualms with using new technologies (see the chart directly above and below for Forrester’s findings to back this up.)

It’s not a huge leap of faith to see that if the right features are added to mobile banking, we’ll be the ones to jump on the bandwagon first and use these features the most.

Case in point… During the 2007 YES Summit we heard about a successful mobile banking initiative from Paul Sidhu, Manager of Electronic Commerce over at The Golden 1 Credit Union located in sunny California.

The Golden 1 has two services billed under the online banking moniker… a text messaging service and a wireless web service. And members who use online banking are able to use their cell to access accounts, transfer funds, and pay bills (all with a password and username, of course.)

Paul explained that almost half of all members using the text messaging service and almost a third of all members using the wireless web service are under the age of 30. Paul was also kind enough to share that 6% of all The Golden 1′s members are using one of these mobile banking programs.

So, can mobile banking work for credit unions? Yes. Is mobile banking relevant for your members under 30 as well as other members? Yes, and even more so as technology develops. Will members use it? Yes, especially Gen Y.

If that’s the case, then why aren’t more credit unions pursuing and/or offering mobile banking?

4 Responses to “>Mobile Banking Ready to Takeoff, Gen Y On Board?”

  1. Susan Follick

    >While many credit unions remain skeptical, recent research indicates consumers utilizing mobile banking will grow from 1.7 million (end of 2007) to more than 8 million by the end of ’08. It’s probably true that many “older” CU members won’t use the service, but all-important Gen Y’ers will. Research tells us at least 21 percent of Gen Y’ers (aged 18-24) use cell phones (or PDAs) for mobile banking … compared to 10 percent of all consumers. Credit unions need to view mobile banking as the first step in a three step journey that culminates with delivering your brand message via cell phones. At PSCU Financial Services, and our ProjectNewAge initiative, we believe CUs should first offer mobile Checking Balances services, then develop strategies for Mobile Payments. By first providing those mobile services, CUs can then begin leveraging mobile for marketing purposes.

  2. Melina Young

    >I am so glad that someone wrote a post on this. I have been thinking about this for a while, because we recently set up a similar “checkbook balancing” system through an independent site. I can text in withdrawls as I make them and they are automatically deducted from my account. I know that I, as someone who doesn’t like to go to the grocery store or bank/cu unless I really have to, would absolutely utilize this service. I never balanced my checkbook (ever) until we started using clearcheckbook.com. This feature would help influence me to change financial institutions if it was available to me.

  3. Mike Templeton

    >The other side of this story is that CUs MUST keep up with new technology, such as mobile payments. If they don’t, the Gen Y crowd that everyone is after may gravitate towards somewhere that does offer the service, which may be a bank.

    The potential and the market is out there for this technology. CUs just need to capitalize on it and find out how to integrate it into their offerings.

    Mobile payments are hear to stay (in fact, I just heard that in Miami you can pay the parking meter via phone), so let’s get moving on it!

  4. bank

    >Mobile banking (also known as M-Banking, mbanking, SMS Banking etc.) is a term used for performing balance checks, account transactions, payments etc. via a mobile device such as a mobile phone. Mobile banking today (2007) is most often performed via SMS or the Mobile Internet but can also use special programs called clients downloaded to the mobile device.

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