Mobile Banking Can Increase Banks' Revenue, Lower Attrition
Banks and credit unions that adopt mobile banking can expect lower customer attrition and increased product holdings, transactions and revenue, according to a recent study by Fiserv, Inc.
The study evaluated the data of more than 67,000 mobile banking users at eight credit unions and nine banks for an entire year. The researchers focused on the actions of mobile banking users three months before and three months after they started using the service.
Not only does mobile banking adoption result in lower customer attrition, it can also:
• Increase product holdings. Loans, CDs, credit cards and mortgages increase significantly after the adoption of mobile banking. Mobile users have an average of 2.3 products from their primary financial institution while their branch-only peers have only 1.3 products, an increase of more than 75%.
• Increase transaction frequency. Three months after mobile adoption, users increased the number of debit and credit card, ATM and ACH transactions they made.
• Increase average revenue. Because they complete more transactions and hold more products, mobile banking users generate more revenue. For credit unions, mobile banking members generate 36% more revenue than their branch-only counterparts. Traditional banks receive 72% higher revenue from their mobile users than their branch-only customers.
“The financial institutions in this study are seeing tangible revenue from mobile banking,” said Matt Wilcox, senior vice president, marketing strategy and innovation, Fiserv. “Marketing mobile banking and highlighting how it can help consumers keep pace with the speed of life is absolutely essential if financial institutions want to grow adoption and use of the service and reap the benefits of their mobile investment.”