By Brad Powell

You may have seen the headlines published around New Year’s Day.

Mobile banking, it was reported, "has already eclipsed physical branches in terms of the percentage of U.S. customers using it to take care of their weekly banking needs."

The news, pulled from a Javelin Strategy & Research report, was not truly surprising. Mobile banking, like everything else on mobile, has been growing. And the pace of branch closings has been pretty steady.

This tipping-point story, however, raises some questions that are more interesting for those of us following closely. Questions like: What is driving mobile banking growth? Can banks and credit unions stimulate even faster growth among their customers? What will come next?

Some recent smart reporting helps answer these questions. And the authors of these reports make some insightful observations, as well. Here’s a look at three of them:

1. It's Just the Beginning

Brett King, the CEO of mobile banking startup Moven, doesn’t stop at the notion that we’ll see fewer and fewer bank branches in the future. His take:
"Paper and signatures have no future in the banking world — at all."

In a detailed blog post titled “The Death of Bank Products Has Been Greatly Under-Exaggerated,” King writes that physical locations, physical documents and more are all on their way out.

"If you have a physical representation of a bank product (card, checkbook, bank statements, application form, sales brochure, etc.), prepare for that to disappear by early next decade almost entirely," he writes.

And banks' and credit unions' upstart competitors — fintech startups — don't "use paper or signatures already — they’re way ahead of the curve on this. They’ve got no legacy process to circumvent."

King's conclusion:

“This is going to take a complete, from the ground up, rethink of every product in the business as we re-task it for real-time engagement, and it has already started. 2016 is the year where bankers start to have to deal with it in earnest."

As the CEO of a fintech startup, King certainly has a distinct perspective. With that in mind, I still recommend reading his entire post.

2. Your Customers Are Ready for Mobile Banking, Even If They Don't Know It Yet

A recent Bain & Company report examines what it calls "a classic chicken-and-egg question" ─ Are mobile banking adoption rates driven by consumer demand, or by banks' efforts to encourage more customers to use mobile?

(It's actually one of several interesting parts of this in-depth report.)

Bain's look at data and trends around the world ─ in which countries such as South Korea and China have seen particularly high adoption rates, and others such as Japan and Germany have not ─ makes the chicken-and-egg question a little easier to answer.

And the answer, the report states, is: "Evidence suggests that banks have a significant ability to push consumers along, and the differences in mobile adoption depend on how aggressively banks compete with each other on mobile innovation rather than on the structure of their markets."

Mobile banking, of course, can create significant savings for banks and credit unions if adoption is widespread. Before a financial institution embarks on a major mobile initiative, though, its leaders might ask "Are our customers ready for this?"

Bain's report indicates most customer bases will be ready ─ it happens again and again, worldwide.

"In product after product," the report states, "consumers have proven more willing than suppliers anticipated to transact via mobile or online."

3. Mobile & Mortgages: Two Big Disconnects

Making payments, checking balances and transferring money are some of the most common transactions U.S. consumers are completing with mobile banking apps. But that doesn't mean there aren’t opportunities in more complex transactions, such as mortgages.

The thing is, according to a recent article in Mortgage News Daily, financial institutions and their customers aren't exactly on the same page when it comes to mortgages.

The article, citing data from Fannie Mae's National Housing Survey (NHS), pinpoints two disconnects:

● Consumers want mobile banking apps to offer mortgage capabilities more than banks realize.

"Results from the NHS show that, although only 12 percent of recent homebuyers say they have used mobile devices to get a mortgage quote and 6 percent to fill out a mortgage application, 30 percent and 20 percent, respectively, say they would like to use a mobile device in the future to perform these mortgage activities."

● Consumers have a different idea of what an app with mortgage features should do.

In the survey, lenders said the most important mortgage functions an app should offer are:


Consumers, meanwhile, focus on one simple task: obtaining a mortgage quote via mobile.

Not only do consumers prioritize this functionality much more than lenders, they also say they are "less interested in using mobile devices to fill out a mortgage application than lenders appear to be in providing that ability."

With that prediction from the article on Fannie Mae's National Housing Survey in mind, it will be interesting to see how QuickenLoan’s new Rocket Mortgage product performs.

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When taken together, these three articles offer three lessons that go deeper than “mobile banking is growing.” They are:

● More customers will be demanding more on mobile ─ soon.

● Banks and credit unions have more control than they may realize over how quickly these customers adopt.

●When the new customers log in to the mobile apps, their expectations won’t always be, “I want to complete every part of every transaction on my phone.”

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Compliance and Your Credit Union

• Face an daunting burden of regulatory requests?
• Struggle to manage the multiple experts inside and outside your organization who must respond to exam requests?
• Use email for regulatory communication -- possibly opening yourself to legal discovery?
• Receive the same request more than once but provide a different answer each time?

If these challenges sound familiar, Axiaware's new credit union compliance software product, Redboard, could help.