THE (RE)BIRTH OF MOBILE BANKING

By: Paul Zeckser

April 18, 2007

Twelve years ago Wells Fargo was the first to introduce online banking. Today, 45 million people bank online in the United States. In March of this year, Citi launched a mobile banking application which allows consumers to pay bills, check their account balances and transfer funds through their wireless phones. While mobile banking was tested, unsuccessfully, once before in the early 2000s (Wells Fargo, Bank of Montreal, Citi), this second coming of mobile banking offers more for the consumer. Are consumers more interested in mobile banking this time around?

Along with Citi, Bank of America and Cingular plan nationwide roll-outs of mobile banking for this year. To better understand the potental of these services, Compete fielded a survey in early April 2007, targeted at active online bankers (logged in within the past 30 days).

Compete found that 29% of current online bankers would “definitely” or “probably” use banking features if they were available on a wireless phone. Furthermore, 33% of respondents indicated they were undecided about mobile banking, indicating an opportunity for banks and wireless providers to win over these consumers.

Compete also asked consumers about the types of features and functionality they were likely to use. Of those open to online banking, nearly 70% said they would use it to look up account balance information. Almost half of respondents also indicated they would use mobile banking for customer service inquiries, locating ATMs, transferring money and reviewing statements. A significantly lower percentage of respondents (under 20%) said they would use mobile banking to trade stocks or manage retirement accounts.

MONTHLY METRICS: MARCH A MIXED MONTH

Financial Services Indicators: Change From February 2007 to March 2007