A recent survey by the Federal Reserve Bank of Boston offers an overview of mobile banking and mobile payment adoption, unveiling that “Among FIs offering and tracking business mobile banking adoption, more than half (55 percent) still have adoption rates less than five percent.”
According to this stat on the shockingly low adoption rate, the business arm of most banks has been slow to offer or optimize any useful mobile capabilities for their customers.
In fact, one of the ironies in financial services as we know them today is that before, it was innovations from corporate banking (who had the budget) that eventually impacted innovation in the retail side. Today it is the reverse.
This report also throws some light upon the current state of financial services’ digitalization, reinforcing some things we already knew: mobile banking is omnipresent, with 89% of the financial institutions surveyed saying they already offered it (making one to wonder about the reminding 11%) and nearly all FIs providing native apps.
Decades in this trade tell me that financial institutions should pay close attention to their rate of check deposits in the mobile channel as it is a clear indicator of progress towards broader digital adoption. This is especially important as C2B and B2B checks account for roughly two-thirds of all check deposits and that checks are here to stay for the foreseeable future.
Digital Adoption Begins Today, Solving the Problems People Have Today
Business banking changed forever back to January 9, 2007, when Steve Jobs stepped on stage and introduced the iPhone, shifting the paradigm from business to people and issuing the death sentence for the until then corporate’s mobile device of choice – the Blackberry.
Since then, new and improved camera capabilities have been added to consumer devices, enabling banks to offer transactional capabilities to their customers, most notably depositing a check from anywhere. In other words, the days of mobile banking simply being a ‘view my money’ technology are gone forever. Thus, just as the Blackberry gave way to the iPhone, the business side of banks needs to learn from their retail banking peers.
In other words: digital adoption begins today, solving the problems people have today. If you can’t get that right, your FI is not going to be valued above, or even in-line, with its peer group.
For example, if you were an employee for a small business, you would regularly visit small shops or homes, being given checks to pay for the services or products delivered on behalf of your employer. You’d then take those checks to the office where they sit until someone physically took them to the bank or ATM for deposit – a delay and process that costs money. After you’ve given the checks to your employer, you then get a check from someone made out to you – maybe it’s a rebate check or a check from a friend. Unlike your employer, you’re more likely to deposit that check with your smartphone.
For those interested in delving deeper into this topic, I’d recommend reading these two excellent reports and insightful opinion piece:
Bain & Company
The biggest barrier to mobile banking growth? By Kevin Tynan from Liberty Bank for Savings in Chicago.
About Michael Diamond
General Manager, Payments Solutions. Mike leads the team that invented, patented, and now develops and markets the most exciting mobile product to hit banking: Mobile Check Deposit. Mitek’s payments team is committed to leveraging mobile capture in new ways to delight mobile users.
A former Military Intelligence Officer in the USAR and is a veteran of Operation Desert Storm, Mike has grown innovative technology companies such as Obopay, IBM, Alphablox, S1 and Edify.