On the Brink of Innovation for Mobile Banking

Consumers are growing increasingly dependent on mobile phones to digest information and conduct their day-to-day business. It seems natural that banks have picked up on this pattern of consumption and invested in mobile banking. Over the last three years, we’ve seen a steady rise in the number of banks offering mobile services to their customers. Similarly, the number of users hungry for mobile banking has skyrocketed. Yet one thing that appears to lag comparatively, according to Rob Meddis of Celent, is the number of new features introduced in mobile banking. Sure, most mobile banking apps let you view your transaction history, pay bills, or find local branches and ATMs, but these features have all been around for a few years now.

Still, we found a few features that caught our eye and could pave a new way forward:

1. Check deposits from smartphones:

USAA—a bank primarily serving military personnel and families—rolled out a feature last year that allows users to deposit paper checks into their accounts by simply taking a picture of it on their smartphone. After snapping a picture of their check, users can access their funds in virtually seconds. Chase and US Bank are scheduled to roll out similar “remote-deposit capture” technology later on this year. Let’s hope that more banks follow suit.

2. Low-balance alerts and fund transfers via text messaging:

Some banks can alert users via text message when their account balances are running low. Chase announced last month that it will be rolling out this feature and will take it even a bit further. Once customers receive a low-balance alert, they’ll have the opportunity to text back to transfer funds from another account to avoid getting hit with overdraft fees.

3. Location-based shopping concierges

Citi recently announced Citi Shopper, a location-based mobile app that sends deals and coupons to consumers based on their location. Similarly, US Bank plans to launch a “mobile shopping concierge” which will also direct targeted offers to consumers. It will allegedly get to the level of detail where consumers will receive a toothpaste coupon if they’re standing in the toothpaste aisle of a grocery store. A bit intrusive for my liking, but with location-based apps growing wildly popular, this will likely strike a chord with many customers.

These “concierge” offerings of course are well designed for the banks. They influence customers pre-purchase and surely will spur impulsive spending. But if a consumer had a clear intention of making a particular purchase, why not take advantage of a few bucks off? If consumers can resist the innate temptation of splurging simply because a coupon popped up on their phone, these new services could prove beneficial.

With huge demand from consumers and investments from the banks, Meddis of Celent claims that we’re on the verge of massive innovation in mobile banking. As banks continue to invest in mobile and internet payment services (we’ve seen hirings of prominent execs and unveilings of elaborate mobile road maps), consumers should expect to see a lot more of these features in the coming months.

Do you use mobile banking? If you could cook up the mobile banking feature of your dreams, what would it include?

Update 6/29/10: Citibank announced the launch of text banking features last week. With the big four US banks now expanding into this space, text banking has become a must-have. Jim Bruene of NetBanker notes that “those without it have a tangible deficiency that will cost them customers, especially in the heavy-texting youth market.”