Will This Year Be the Tipping Point for Mobile Banking?

I guess that depends on who you ask, and how you define “tipping point”.

I read a report today suggesting that 2008 May Be the Tipping Point for Mobile Banking. The article focuses on research conducted by the Tower Group and brings up some interesting points about mobile banking, those likely to use it, and the technology that supports it.

But I’m not convinced that mobile banking will “move into the mainstream” this year as the article suggests. And even if it does enter the mainstream spotlight and increase awareness, I doubt that will translate into mainstream adoption by both institutions and customers.

Sure, I agree with Virginia Garcia, Research Director at Tower Group when she says “the downloads are faster, and the devices are better”, referring to cell phone technology that supports mobile banking. But what about preparation on the bank side? I’d be willing to bet that, while some institutions are planning to introduce mobile banking this year (these being the national and regional players that don’t currently offer it), many more haven’t taken that first step.

The article also quotes Garcia as saying "It's not necessarily for the mainstream customer base, but its going to grow as a factor in retaining and attracting new customers.” And, “As these bigger banks move into the regional markets, the smaller banks will have to develop technological platforms, such as mobile banking, to maintain parity and keep their customers…the competition is on a level playing field, forcing the smaller institutions to respond.”

I agree that mobile banking isn’t for the mainstream customer base. And, I also agree that smaller banks will need to take steps to stay competitive in terms of technology. But, I have a hard time thinking that mobile banking will play a significant factor in today’s institutions’ customer retention and acquisition strategies – or that banks and credit unions need to be worried about adding mobile banking to “keep their customers.”

And, even if the regional and national competition is on a level playing field offering mobile banking, the response by smaller institutions shouldn’t automatically be the addition of mobile banking just because the guy up the street is offering it.

Will mobile banking be offered by more institutions and used by more customers by the end of the year? Without a doubt.

Will 2008 be the tipping point for mobile banking? What do you think?