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Consumers No to apps sharing info yes to mobile banking
MADISON, Wis. (9/1012)--Three studies about the growth in popularity of smartphones and mobile applications offer insights into how credit unions are incorporating the new services into their products and services mix, and what consumers expect from them.

Two non-credit union related studies indicate that consumers are saying "no" to apps that share too much personal information while saying "yes" to conducting their banking business on smartphones and tablets.  A third study-- a white paper from Plano, Texas-based Catalyst Corporate FCU--provides data from credit union CEOs and notes a substantial number of credit unions are already offering mobile banking capabilities, while those that aren't are racing the clock to provide them.

Catalyst Corporate's white paper, entitled "Is That a Credit Union in Your Hand? Credit Unions Respond to the Mobile Revolution," was unveiled Thursday at the Texas Credit Union League's Leadership Conference in San Antonio. It gathered the input through an online survey earlier this year. Of 1,701 CEOs contacted, 368, or 22%, participated.

Key findings indicate that:

  • About one third of CEOs surveyed reported their credit union already offers mobile banking.
  • More than 40% of credit unions that don't offer mobile banking yet say they will launch a product within six to 12 months, while 15% of this group plan to offer mobile banking within three months.
  • More than 80% of credit union CEOs responding currently use smart phones.
  • About half of the smartphone-toting CEOs already are using these devices to conduct mobile banking.
  • Among credit unions offering mobile banking, the most important features of their mobile banking product were: balance inquiry, transaction history and transfers.  Larger credit unions also placed high importance on branch/ATM locators, mobile check deposit and bill pay.
  • The greatest challenges faced by those surveyed in terms of mobile banking included security of member data, operational costs and member awareness.
" Mobile banking has the potential to be the greatest interaction a credit union has with a member," said Brad Ganey, chief operating officer at Catalyst Corporate. Although mobile banking may not be right for every credit union, most experts agree that every credit union should, at a minimum, be examining the channel's merits and drawbacks. "Mobile banking is more than an add-on service. It will become a fundamental component of the credit union's delivery service system," Ganey said.

Catalyst offered its own mobile banking product earlier this year with a variety of mobile banking configurations to fit different credit unions' needs. These include a stand-alone mobile banking app; stand-alone mobile check deposit that includes the ability to integrate with a credit union's mobile banking product from another vendor; and the mobile banking app with mobile check deposit.

Another survey, by Pew Research Center's Internet & American Life Project, had warnings for credit unions and others developing their own smartphone apps: More than half of the people who have downloaded apps have uninstalled or outright avoided them due to privacy concerns (American Banker Sept. 6).

Other findings:

  • Of the roughly 88% of American adults who own cell phones, 43% say they have downloaded an app.
  • Fifty-four percent of app users did not even consider installing an app when they discovered how much personal information they were sharing.
  • Thirty percent of app users uninstalled an app when they found out how much personal information they were handing over.
  • Overall, 57% of all users have either uninstalled or decided not to install an app that shows signs of over-sharing.
A third study, a 30-month study of application traffic sources by Providence, R.I.-based financial software company Andera, indicated that consumers are increasingly willing to conduct banking business with mobile and wireless devices such as smartphones and tablets (Fierce CIO Sept. 6).

Andera noted that "mobile banking" has largely meant using mobile phones to check account balances and transfer funds between accounts, but that is changing. It cited a Federal Reserve study released in March that found 90% of mobile banking is used to check account balances or recent transactions, followed by transferring money (42%).

Andera's study indicated that trend is developing. "In the two years since we began tracking and analyzing the sources of visits to our company's platforms, we have seen a 70.3% growth in total number of online visits. But within that total number of online visits, the portion that comes from mobile phones and tablet devices has grown dramatically--by 269%," said Andera President Charles Kroll.

He noted that Andera's data says two things:  More and more consumers are getting used to dealing with their financial institutions online. And they are getting more confident about establishing new banking relationships or expanding existing ones on a mobile, paperless platform.  They are no longer using their smartphones or tablets just for checking balances and transferring funds.

"The message to banks and credit unions is unmistakable: your customers will be expecting you to deliver through this channel. Build that capability now, before they look elsewhere."
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