Industry News

How much do consumers really value mobile banking?

Last February we said that 2014 would be a key year for banks to up their mobile game, as they faced an ever-narrowing window to play a dominant role in the future of mobile payments, with customers becoming ever more demanding about mobile banking offerings. A year later some startling research has emerged which indicates just how demanding such users are getting.

will-they-pay-for-appsA survey by SNL financial conducted among 4,000+ adult smartphone bank app users in the United States in February focused on the question of whether the respondents would pay $3 a month to use their bank’s app. Of those polled, more than three-quarters (76%) said no.

One could be forgiving for looking at this lopsided result and jumping to the conclusion that mobile banking has a bleak future. After all, if even some younger “millennials” aren’t willing to spend the equivalent of a cheap latte on their banking app, why are banks even bothering?

But as in most cases, it would be foolhardy to make such a hasty assumption based on this headline-grabbing number.

For one thing, the underlying survey data are more nuanced. There is significant variation between different customers of different banks. (Among the banks with the largest number of customers represented, 33% of those using Bank of America’s app said they would stump up the $3 for it every month, which is almost twice the 18% of those banking with Capital One who say the same.) This would suggest that the quality of a bank’s mobile experience greatly influences its perceived value to customers.

There are some unexpected variances with regard to different age groups and regions.

Yet even if it were demonstrably true that an overwhelming share of bankable individuals around the world were unwilling to pay for a mobile banking app, and that this percentage was growing, this actually says little about the perceived value of such technology. Instead, such a reluctance may merely reflect an increasingly widespread belief that mobile banking apps are not a frill or premium offering but the primary window through which any credible full-service bank will soon do most of its interaction with retail customers.

So just as consumer banks which have not yet introduced world-class Internet or mobile banking products are under greater pressure than ever to do so, banks which continue to charge even a nominal fee for downloading or using their mobile app should expect to find themselves under mounting pressure to stop. It might even be argued that 2015 is the year for banks which are otherwise on top of their mobile game to figure this out, in the process opening the door to ever-greater customer satisfaction and engagement.