In today’s technology-driven world, being able to access the Internet almost anywhere on your laptop or mobile device has rapidly changed the way communication occurs. A 2012 survey done by the Pew Research Center found 55 percent of Americans use the Internet on their mobile phones, nearly double what that same study found just three years ago. As mobile Internet use continues to grow, companies are looking at new opportunities to engage and connect with consumers through their mobile device.
The banking industry, concerned about losing touch with a digital generation that never steps into a branch, has seen massive success with mobile technology in recent years. The number of people using mobile applications to bank has grown by 43 percent since 2011 and now stands at some 40 million nationwide, according to a recent survey from Forrester Research, a Cambridge research firm. And that growth is expected to continue, with projected use by 2017 at about 100 million, or nearly half of all adults who currently bank online. This will create demand for skilled workers who can successfully integrate new technology into the banking sector to proactively deliver services that either anticipate a customer need or improve their financials.
If so many customers are comfortable depositing a check using the camera on their smartphone, making transfers between accounts or paying bills with the touch of a smartphone screen, why haven’t all customers switched to a mobile platform?
For starters, not everyone has a mobile device that is compatible with these platforms. Only about 37 percent of Baby Boomers own a smartphone, according to eMarketer research. But smartphone penetration continues to increase, as illustrated by the Pew study. For Millennials, cellphones are ubiquitous, with the Pew Research Center’s survey reporting that 97 percent of Millennials own a cell phone, and 80 percent own a smartphone. But even Millennials haven’t fully embraced the use of mobile banking. Keeping all of their account information on their mobile device makes some feel insecure and vulnerable to hacking. Continuing to build trust with these customers will be key.
Getting Social
Social media is the first step for banks looking to stay competitive and build trust with customers. But Millennial customers are demanding more, and they make up a significant part of the customer profile of today’s banks. Banks need to respond by providing services in a manner that addresses three critical components—the context, location and technology their tech-savvy customers are using. Integrating online and mobile banking software with social media tools is the latest trend that speaks to these components. Examples include allowing users to do things like automatically check in on Foursquare when they pay a merchant, post comments directly to Facebook, or rate a restaurant they just purchased a meal at via their linked Yelp account.
As the banking industry continues to evolve to meet the increasing needs of its mobile, social consumers, more experts in this industry will be needed to lead and advise banks on strategy and best practices. Where I teach at the New England College of Business and Finance, our master of science in finance students take courses such as financial ethics that prepare them for handling clients’ personal banking data, ensuring they protect client privacy while also establishing a trusting relationship with them.
Building relationships with customers may take time, but it is well worth the effort. Customer relationships are no longer built solely through face-to-face conversations at banks. They are nurtured through 24/7 customer service that responds to the needs of the digital-minded, social, mobile consumer. Bankers should gain first-hand experience working with mobile customers so they can grow their business and ensure their clients continue to connect with them.
Carla Patalano serves as program chair for the master of science in finance program at New England College of Business and Finance.
