The developments represent a shift from a few years ago, when customers used their phones primarily to check their account balances or find the nearest branch. Now, in countries like the United States, they are manipulating their devices to deposit checks and transfer money between accounts.
First Financial Bank, a community lender with 55 branches in Texas, just launched a feature that lets you pay bills via phone by simply snapping a photo of your bill. ig database US Bancorp, the fifth-largest U.S. bank by assets, plans to introduce its own version of the service, known as “photo pay,” in March.
The trend has been embraced by young customers who are increasingly relying on their smartphones to perform everyday tasks. It remains to be seen, however, whether not-so-young customers, many of whom took their time to adopt online banking and are the most profitable in the industry, are willing to make another switch.
Mobile banking adoption is being fueled by the explosion in smartphone usage. Nearly half of Americans who use cell phones own a smartphone, according to mobile industry estimates. Latin America lags behind, though the trend is the same. Our Mobile Planet, a study commissioned by Google in May 2012, showed smartphone penetration at the time was 24% in Argentina, 20% in Mexico and 14% in Brazil.
So-called mobile banking accounts for about 8 percent of U.S. transactions, while online transactions account for 53 percent and in-branch transactions for 14 percent, according to consulting firm AlixPartners. Other methods, including ATMs, make up the remainder.
Mobile banking “has gone from being an experiment to being a core experience, as important as branches, call centers and the Internet,” said Ryan McInerney, who heads consumer banking operations at J.P. Morgan Chase & Co. The New York bank, which began offering mobile banking in 2009, says about 13 million customers use the service.
Although major banking groups have made progress in launching applications for smartphones and tablets, mobile banking penetration in Latin America is still in its early stages.
Banamex, Citigroup's subsidiary in Mexico and the country's second-largest bank, says it uses its mobile app more to satisfy its current customer base than to attract new users.
The app, launched in April 2012, has 150,000 active customers, part of the bank's 1.3 million e-users, a group that includes those who conduct transactions via the website or from a cellphone using text messages.
"What we are seeing more and more is that any channel you open, the customer adopts it, but they do it as just another channel and end up choosing the one that best suits their convenience or the one they trust the most," observed Marcelo Scaglia, director of business development at Banamex. "There are people who don't want to set foot in a branch and prefer remote technologies, but they are not necessarily going to do everything from a mobile phone, which due to its size also has its limitations," he added.
Banco Santander Chile has a platform that grew from 5,000 users in its first month of launch, in July 2010, to 155,000 in January of this year. According to the bank, almost 30% of current account holders use the mobile platform to consult or carry out transactions. Nearly 25% of the transactions processed by the bank's channels are handled via the Internet and, of these, 5% are done through mobile devices (smartphones or tablets), the bank indicated.
The transactions carried out include fund transfers, credit card payments and cell phone top-ups.
Itaú-Unibanco, meanwhile, reported that its mobile banking applications had accumulated 3.9 million downloads by the end of 2012, after adding 2.8 million downloads during the previous year. "Our expectation is that mobile banking will become, in some cases, the bank's second largest transaction channel," said Ricardo Guerra, director of channels for Brazil's largest private bank.
