Emerging technologies have paved the way for remarkable advances in payment capabilities, allowing consumers to manage cash flow in ways many never thought possible. As more and more financial institutions embrace mobile payment systems, they’re discovering improvements in customer access and overall satisfaction. At the same time, they’re also facing a few concerns related to the potential demise of traditional banking relationships.
A Mobile Revolution
From RFID (Radio Frequency Identification) and SMS (Short Message Service) to mobile wallets and wearable devices, new payment technologies are burgeoning throughout the United States and the rest of the world. While new innovations point toward faster, more fluid transactions, they also provide increased mobile capabilities that allow consumers to manage their money from anywhere.
While remote money management looks to be a major force in the banking world, it has a few limitations in its current form. Not only is it somewhat time consuming, it also lacks seamless integration, forcing users to log into several different platforms to complete what ought to be relatively simple financial transactions.
Moving forward, programs should aim to remove barriers that prevent seamless transacting through consolidation and increased compatibility with various devices. Ideally, the consumer would maintain his or her money in one secure place and then disseminate these funds to checking accounts, prepaid cards or wherever else needed. While credit, debit and prepaid cards still exist, these consolidated programs are conveniently managed through a single portal.
What It Means for Traditional Banking Relationships
As mobile banking proliferates, branch attendance seems to be on the decline. Right now, about 50 percent of America’s commercial banks offer some form of mobile banking. In turn, branch numbers have declined by 9 percent in the past three years, and nearly half of all bankers predict that number to hit at least 25 percent over the next half-decade.(source by The Financial Brand)
While this change is apt to rattle the nerves of some FIs, it shouldn’t dramatically alter the way customers and members feel about their financial institutions. As advancing technology allows FIs to better serve the public, customer satisfaction inevitably improves. Likewise, in the face of increased demand for banking autonomy, many FIs are transforming their branches. For instance, as more and more FIs implement “pop-up” branches in the form of electronic banking kiosks, they’re able to increase physical presence without opening new branches.
By making proactive adjustments, financial institutions can stay at the forefront of change, while enjoying increased membership and improved retention. In the end, technological innovations provide opportunity for those who are willing to evolve. The question, however, remains: will people adopt?