Banks pour one-third of digital investments into mobile
Banks are setting aside over one-third of their digital channel investments for mobile initiatives, according to a new report from Forrester Research.
The report, “The State of North American Digital Banking: Priorities, Goals, and Metrics,” points to growing interest from consumers in mobile banking activities and financial institutions’ recognition that they need to be active in the space. For 2012, investment in the mobile channel represents a significant portion of overall digital spending, with a focus on alerts, remote deposit capture and person-to-person payments.
“Mobile is a third of retail bank’s digital budgets,” said Brad Strothkamp, an analyst at Forrester Research, Cambridge, MA, and author of the report. “That is a huge amount considering the relative short lifespan of mobile banking.
“Our survey and analysis shows that mobile initiatives are well into next generation territory having moved well beyond basic functionality – i.e. balances, transfer – into extended functionality – i.e. mobile deposit, P2P, and advanced money transfers,” he said.
Investment in innovation
The report found that mobile investments account for more than one-third of overall investment in digital channels for banks. Additionally, the investment in innovation, a key aspect of the mobile channel, comprises more than 10 percent of budgets.
Financial institutions plan to allocate eight percent of their digital budgets to mobile payments, seven percent to mobile servicing improvements, six percent to mobile redesign, three percent to mobile money movement, three percent to mobile personal financial management, two percent to mobile sales improvements and two percent to mobile security.
While banks are moving forward in mobile, there are still some issues that they are concerned about.
The top issues related to mobile banking that financial institutions are keeping an eye include remote deposit capture and mobile wallets, according to the report. While 13 of 18 executives surveyed said they see digital wallets as a strategic opportunity, they are also taking a wait-and-see attitude toward investing in this space.
The deep end
The focus on mobile is coming as consumers increasingly demand these services.
Mobile banking growth is increasing both in the U.S. and Canada, according to the report. In the U.S., 15 percent of online adults were active mobile bankers in 2011, up from five percent in 2008. In Canada, 20 percent of online adults are active mobile bankers, up from eight percent in 2010.
U.S. consumers who opened financial products reported that they opened 37 percent of these products online, two percent by mobile and 36 percent in a branch.
The report also suggests there is a growing opportunity for banks in mobile payments.
While bill payment has been a key feature of online baking offerings for more than a decade, consumer interest in person-to-person payments and remote deposit capture is forcing banks to put more of a focus on mobile payments.
The report found that 22 percent of U.S. online adults were interested in mobile payments other than bill payment in 2011, up from 11 percent in 2008.