I’m not sure if you heard, but this little tech company out in California has a couple of neat devices called the iPhone and iPad. So far, banks and credit unions have been holding back from jumping into the mobile banking space. But I believe momentum will grow exponentially over the next two years.
The problem is it might just be too late. One of the main reason FIs haven’t jumped into the mobile space is because there is no clear ROI. Instead, they mostly hear about the cost savings in other areas like the call center. No one is charging for mobile banking in the United States. And until Bank of America, Wells Fargo or Citibank does, I don’t think anyone will.
One idea I have heard floated for income is charging commercial customers. The reason being companies are typically charged for using cash management services. Another one is getting transaction income from mobile payments. Make no mistake, mobile is the biggest growth area for financial services. I believe that within five years, customers will access their account information mostly from a mobile device. The iPad and other “tablet” computers will only accelerate this growth.
Fiserv’s iPad demo at Finovate Spring 2010 is just a sample of what’s to come. But what no one is noticing are the companies that are going around banks and credit unions. Square’s apps for the iPhone and iPad will take away from those lucrative merchant accounts that customers normally get through their FI.
The biggest threat is the new Transaction app that Apple is working on. Basically, Apple will turn your iPhone into a credit card by using NFC. So just like PayPal became the standard for online transactions, it looks like Apple could become the standard for mobile transactions. And if everything is going mobile, where exactly does that leave your FI?