CUs will have significantly more success if they actively engage with potential mobile users. By John Moon Sponsored by Fiserv
Mobile banking is valued as a way to better serve and engage members, yet credit unions may not realize the potential for solid mobile ROI for institutions that focus on driving adoption and usage. To quantify the tangible returns generated by mobile banking users, Fiserv, in conjunction with Raddon Financial Group, conducted a year-long study and evaluated data from more than 67,000 mobile banking users at eight credit unions and nine banks. Researchers looked specifically at the actions of mobile banking users three months before and three months after they started using the service. The study found specific returns on the mobile investment in the following areas:
Increased product holdings. The average number of product holdings, including loans, certificates of deposit, credit cards and mortgages, increased after consumers’ adoption of mobile banking.
Increased transaction frequency. In the three months after adoption of mobile banking, consumers in the study significantly increased both the number and value of their debit and credit card, ATM and ACH transactions. This is significant because many transactions generate revenue, such as interchange revenue from card transactions.
Decreased branch transactions. In the three months after adoption of mobile banking, there was a 32 percent decrease in branch transactions for credit union members, likely because simple transactions moved to the mobile channel. Although mobile banking users are less likely to go into the branch, they will likely visit to conduct certain high value transactions in person.
Lowered attrition. Mobile banking users are less likely than branch-only users to leave their financial institutions. Among larger credit unions in the study, attrition rates were 4.9 percent for mobile banking users, compared to 13.4 percent for branch-only users.
Higher average revenue. Mobile banking users generate more revenue than nonusers in part because they own more products and conduct more transactions. For mobile users at the credit unions in the study, revenue was 36 percent higher than branch-only users. An important takeaway from the study is that a “wait and see” approach is not an effective way to drive mobile service adoption and usage--financial institutions will have significantly more success if they actively engage with potential users. Marketing mobile banking and highlighting how it can help members keep pace with the speed of life is essential if financial institutions want to grow adoption and use of the service and reap the benefits of their mobile investment. Those interested in learning more can download a free white paper, “Mobile Banking Adoption: Where Is the Revenue for Financial Institutions?”.
John Moon is director of consumer adoption marketing for CUES Supplier member Fiserv, Brookfield, Wis. Measuring payment systems' performance, including how to create a payments profit and loss statement, scorecards and dashboards, will be part of the discussion at CUES School of Payments, April 19-20 in Chicago.
