Friday, June 11, 2010

Mobile Banking Can Improve Customer Acquisition by Sixty Percent

One of the more startling takeaways from the Mobile Banking and Emerging Applications Summit this week was when Bob Hedges from Mercatus mentioned that mobile financial services could improve customer acquisition rates by as much as 60% in key customer segments (age under 50) for early moving banks. In fact, according the research findings which were presented at blinding speed at the conference, a bank's mobile presence was more important than online banking, ATM presence or even the convenience of local branches in a customer's decision to select a bank.

Combined with the statistic that more than 30% of U.S. consumers are either using or considering using mobile financial services in the next year, and it is understandable why the best quote from Hedges at the conference was that, "Making a business case for mobile banking is like making a business case for oxygen"!

Other findings shared by Hedges at the conference included that mobile financial services users have higher incomes than traditional customers, use more services and have up to 12% lower attrition (which has been supported by other findings provided by banks recently at other conferences).

Finally, Hedges emphasized to the more than 300 bankers in attendance that the rate at which consumers are adopting mobile banking is must faster than originally anticipated, with an expectation that the number of mobile banking consumers could surpass those who use online banking by 2015.

Given the positive impact that introducing the mobile channel could have on acquisition efforts, servicing costs, utilization of services and attrition, there is no doubt that mobile banking will be emphasized by banks over the next 18 months. Obviously, the spoils will go to those fast moving banks that can introduce mobile banking to their customers and prospects the quickest and who can continue to promote and enhance their offerings to a increasingly technology driven target audience.

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