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Credit Unions Surpass Community Banks In Mobile Banking Battle

Javelin Strategy & Research, who tracks mobile banking offerings and compares adoption by type of financial institution, found credit unions are outperforming community banks. Javelin Strategy & Research’s latest report analyzes the mobile banking offerings, analyzing the impact of increased mobile usage by device and operating system on mobile banking adoption at each type of financial institution.

“Credit unions took a big bite out of big banks in mobile banking this year.
If they continue in this direction, there is even more opportunity for them to take an even bigger chunk.”
– Jim Van Dyke,
President of Javelin

Mobile banking offerings vary by size of financial institution, and consumer adoption varies. Nine out of ten credit unions offer at least web-based mobile banking. But a startling three out of ten community banks reviewed do not offer a single form of mobile banking.

Among top 10 credit unions, 50% offer the triple play — that is, mobile web + app + SMS text banking, and the percentage of members using mobile banking is 19%. There is still room for credit unions to grow, as 80% of the largest regional banks provide all three services and adoption increased to 28%.

Consumer mobile banking growth follows smartphone adoption which is now at 52%.

Javelin research reported that mobile banking added 10 million more U.S. adults in the past year, as smartphone usage surpassed feature phones and tablet adoption surged to 21%.

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“Rising tablet adoption is giving mobile banking its biggest boost. Over the next five years, tablet adoption rates will more than double,” said Mary Monahan, EVP and Research Director for mobile banking at Javelin.

“Despite a slow start, we expect Windows tablets will take market share over the next few years from Android and Apple,” Monahan explained. “All financial institutions regardless of size will need to consider device usage among customers and adjust their strategies to offer the right type of mobile phone and tablet mobile banking solutions.”

“Last year’s Bank Transfer Day saw over 600,000 U.S. adults move their accounts from large banks to small FIs. It was a wake-up call for credit unions and community banks to beef up their offerings,” said Jim Van Dyke, President, Javelin.

“Our report shows that the top ten credit unions took a big bite out of big banks in mobile banking this year,” Van Dyke added. “If credit unions continue in this direction and stay ahead of community banks, there is even more opportunity for them to take a bigger chunk out of the market.”

Javelin Strategy & Research’s “2012 Mobile Banking, Smartphone and Tablet Forecast” compares mobile banking offerings by mode and by device type of the four largest banks, the top ten large regional banks, ten community banks, and ten of the top credit unions (ranked by deposits). The report forecasts mobile phone, smartphone, and tablet adoption by device and operating system. This report is based on data collected online in six surveys of more than 20,000 respondents. It’s 44 pages and contains 31 figures and graphs.

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