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November 21, 2016

How The Banking Industry Has Adopted Mobile Apps

By Special Guest
Gina Tedesco, Purchasing Manager, Rising Capital Associates

Ten years ago, when online banking started, I had hesitations about giving out my credit card information online. Today, in Q4-2016, I log into my bank account, transfer funds between accounts, check balances - and not even bother to log out!

Most people are being forced to be more comfortable with online banking as the world evolves around them. Following the standardization of online banking, banks and other financial institutions have begun to add mobile services, enabling customers to log into their accounts while on mobile devices. Currently, 52 percent of Americans with smartphones and bank accounts use mobile banking and finance apps to check balances, complete transactions, and explore their service options. In a study by Adobe, 80% of consumers reported reviewing bank account information or check balances as a frequently performed activity.

Mobile Apps add Convenience
Large banks and financial institutions have realized the convenience that comes with these applications and have built security safe measures in place in order to combat theft, fraud, and other mischievous activity. This change towards mobile optimization began a decade ago when the first iPhone was released in 2007. In a world where it becomes so easy to stay in touch with one’s social circle, most consumers are looking for ways in which to save time, yet still keep abreast of all their finances.

Banks realized this and began moving the client-advisor relationship towards mobile. Rather than having extensive paper trails, large banks began creating custom apps that saved consumers’ time.

What Does a Bank Really Do?
As digital architects, developers, and high level strategists began putting their vision on paper, questions arose about the nature of banking.

  • Was it really necessary to have a customer come into a physical location?
  • How can individuals create a checking and savings account without ever having to interact with a human?
  • For consumers that wish to open an account, why should it take 25 minutes of face-to-face time with a banker - when the same process can be done on a smartphone in 10 minutes?

As these apps were being built, the structure of the client-financial advisor relationship began to change. Applications not only saved time, they could also be used to retain customers. With push-button notifications, customers could receive alerts when funds went under a certain threshold. Through graphs and pie charts consumers could get a better picture of what’s going on in their account. This placed consumers in a better position to understand their own financial health.

Mobile Apps Offer Cool Services
Not having to come into a physical location allows individuals individuals to save time. Today, you can take a picture of a check and have it deposited in your account in 24 hours; it’s called “mobile check deposit” (I recommend looking up the term to see if your bank has it).

Curious as to what you spent your money on last week? Your bank’s mobile app should have a calendar feature that lets you see the past credit card purchases, enabling you to take better control of your spending habits by checking up on your invoice history.

The Bank is now the Cloud
If you think about it, a physical bank location is an antiquated concept. Branch locations like Wells Fargo were most relevant during the California gold rush of 1848, when miners were bringing in physical gold nuggets that needed to be weighed and changed into cash. The every-day modern consumer is not bringing in gold nuggets, gold bars, or gold coins into their local branch location - expecting to trade it in for cash.

Cash, funny enough, is merely a representation of wealth. It serves as a universal concept of value. Since most cash in 2016 is “non-physical” (i.e. just numbers sitting in accounts) most of the money in the world is abstract. Cash isn’t paper - it’s just sitting in a server room somewhere. Money that is stored in the cloud is waiting for the individuals who have access to it to go in and add and subtract from it.

Cell Phones to Replace Banks
Cell phones will most likely replace physical branch locations in the coming decades as individual account holders are given access to the cloud. With no tangible assets to hold, and more people becoming comfortable with banking mobile apps, smaller branch locations will be redundant. By 2019, it is projected that over 2 billion people will use mobile banking (Source).

Nevertheless, many of us still prefer to do banking face to face. Just like I never really got over my hesitation to provide my credit card information online, so too do I like going into a physical branch location to deposit my checks. Doing so provides me with a sense of security. Maybe one day I’ll do all my banking through my phone - but for now I still like to be greeted with a warm, human smile.

About the Author: Gina Tedesco works as the Purchasing Manager at Rising Capital Associates, a company that services structured settlements and annuity purchases. Gina graduated from Shippensburg University in May of 2010 with a Bachelor of Science in Finance. Since then she has been using her financial acumen to interact with a diverse group of customers on a daily basis, and show individuals the path to financial freedom. 

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