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On-the-move U.S. consumers turning to mobile banking

Snap, tap and done.

That's the catchy mantra of mobile banking, increasingly touted by financial institutions as a way to easily pay bills, check balances and deposit checks from your cellphone. And consumers are heeding the call.

Walk-in, online and ATM transactions are leveling off as U.S. consumers' preferred methods of banking, but on-the-go mobile banking is having a growth spurt.

"Yes, it's an explosion," said Mary Monahan, executive vice president and mobile research director for Javelin Strategy & Research in Pleasanton, Calif. According to Javelin's most recent report, one in four mobile phone users was doing mobile banking in 2012.

"Smartphones are our security blanket. We're looking at them over and over," Monahan said. "If there's a sale at Nordstrom, you want to check your bank balance when you're on the go — not go back home and call up something. That's what's driving this."

Banks and credit unions say they're simply responding to what customers want.

"It's all consumer-driven. If you have a banking account, there are certain types of transactions that are abundantly more convenient done from your bedroom in your bunny slippers," said Doug Johnson, vice president of risk management at the American Bankers Association in Washington, D.C.

Internet banking — in which customers manage their financial life from their home computer or laptop — has been widely used for years. According to a July 2012 ABA survey, 39 percent of U.S. consumers surveyed said they "most often" managed their bank accounts via the Internet, either from a laptop or home computer. That was followed by visits to bank branches and ATMs.

But all three of those have largely stayed flat in recent years, while cellphone banking has nearly tripled as the preferred method — growing from 3 percent in 2010 to 8 percent this year. In a recent Pew Research Center study, the number of bank-by-cellphone Americans nearly doubled in the past two years.

More than 53 percent of the country's 5,800 commercial banks now offer some form of mobile banking. Given the continuing rapid rollout by banks of all sizes, that could hit nearly 75 percent within the next year, Johnson said.

Deposit by phone

The push from Internet to mobile banking got started with "money monitoring," which allows consumers to use their phones to look up a bank balance, see whether a check cleared or get text alerts if an account is running low.

"Now consumers want more: money movement, which is where banks are right now," Monahan said. Financial institutions that don't offer that capability — especially mobile check deposits — will lose customers, she said.

The hottest feature that more banks are pushing these days is the ability to deposit a paper check by cellphone. Nicole Quinonez, a Sacramento, Calif., lobbyist who doesn't have financial clients, said she's been using her Golden 1 Credit Union mobile deposit application for about a year and loves the convenience. The 30-year-old said she rarely goes into a bank because her paycheck is direct-deposited. "So when I do get a paper check, I don't like making a special trip to the bank just to deposit it."

Since its national rollout of mobile banking for Android, BlackBerry, iPhone and Windows phones in November 2012, Wells Fargo has seen as much as 20 percent monthly growth in active users, said Brian Pearce, head of Wells Fargo's digital group. Currently, he said, Wells Fargo users are depositing more than 2 million checks a month using their smartphones. Overall, mobile banking is "the fastest-growing channel" in Wells Fargo history, growing twice as fast as online banking, he said.

On-the-move U.S. consumers turning to mobile banking 11/27/13 [Last modified: Wednesday, November 27, 2013 8:38pm]
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