RANCHO CUCAMUNGA, Calif. (2/4/14)--With smart phones playing an increasingly prominent role in American life, one electronic financial service provider is warning credit unions without mobile banking plans that they are flirting with irrelevance.
CO-OP Financial Services on Monday released a white paper citing a number of studies which found that mobile banking services have a significant impact on customer loyalty.
The Southern California firm pointed to a study by consultants AlixPartners which showed that 52% of consumers between the ages of 26 and 34 would switch financial institutions for a digital wallet, while 38% and 36% would swap for mobile peer-to-peer payment and remote deposit capture systems.
The paper also cited a Yodlee Interactive Survey, which found one in three mobile banking users claiming the services are the main reason why they're doing business with their financial institution, and 71% of mobile banking users reporting that they are "satisfied" or "very satisfied" with online and mobile banking options.
Other research bolstered the CO-OP paper, including a study by Bain & Company Brief, which concluded that mobile-banking users in the U.S. were more loyal than competitors' customers who lack access to similar services, with Net Promoter Scores 14% higher than the average. Accenture, another management consulting firm, also discovered that 21% of a survey's respondents were "planning to" use a mobile device to make payments in stores.
"As consumers live more and more of their lives online, the role of mobile in financial services is shifting along with it," the paper stated. "Just a few years ago, going mobile was a way to surprise and delight tech-savvy credit union members. Today, mobile engagement is fast becoming the only way to serve mobile-driven consumers."
CO-OP, which offers a number of mobile services, cautioned that credit unions that "don't reach members where they live--on their mobile devices--will have a hard time maintaining that primary connection."
Smartphone users now make up more than half the population with 1% of Americans joining the joining that group every month., the firm said, citing more AlixPartners research.
"As the mobile majority grows, both in numbers and in devotion to their devices, leaving your members without the mobile capability they expect may leave them feeling abandoned altogether," the paper concluded.