While many of us assume the main motivation behind every move in the banking industry is cost, Penny Crosman's recent coverage of a new survey of the American Banker Executive Forum shows that determining how to increase profits isn't always the driving force.
In the survey of more than 300 senior bank managers, 87 percent of respondents indicated the primary reason for developing mobile banking apps is the hope technological innovation will strengthen customer ties. Here's a breakdown of other reasons some banks are focusing on mobile app development.
- Seventy-one percent are feeling competitive pressure.
- Fifty-five percent want to move transactions to lower-cost channels.
- Fifty-three percent want to attract new customers.
The survey results reveal executives know mobile banking can save money, but still, they recognize it for an even greater value: appealing to a wider range of consumers. As account holders continue a mass exodus to credit unions and community banks, that appeal certainly counts for something.
Sure, banks have alienated many account holders. Some consumers believe large banks only worry about their bottom lines. More checking account fee experiments aren't doing much to sway that opinion.
However, I think the survey's results show banks recognize the bottom line can't move forward without strong customer retention. The future of banking will inevitably include more fees, but financial institutions know customers will want to see an actual payoff for those fees. I expect that payoff will be displayed with forward-thinking technology that makes banking more efficient.
Your free checking account is being replaced with the ability to deposit a check from your couch. Your willingness to pay rising fees is being rewarded with tools to transfer funds while you're on your morning commute. While banks may be adding fees, they're also adding services.
What do you think? Have mobile apps solidified your ties to your bank? Can mobile development justify additional fees?