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Mobile Banking Forecast: Transactions Vs. Management

A Snarketing post by Ron Shevlin, Director of Research at Cornerstone Advisors

Aite Group recently published my latest report Mobile Banking Forecast: Smartphone and Tablet Use in the United States. It forecasts the use of smartphones and tablets for a  variety of  banking transactions and uses.

If you’re an Aite Group client, you should check out the report, because the really important discussion isn’t about how many mobile banking users there will be, but how the use of smartphones and tablets will differ. (If you’re not an Aite Group client, then you’re a loser, and the only way to redeem yourself is by becoming an Aite Group client).

But, OK, since it’s part of the press release, I can give a little of the plot away: 

Tablets will become financial management devices, and smartphones will become financial transaction devices. Financial institutions should invest accordingly.

This might be a blow to bankers who operate under the delusion that they should “build out functionality in all channels and let customers which channels to use.”

What a load of nonsense. 

For years, I’ve been advocating the concept of right-channeling: That some channels (or in this case, devices) are better than others for certain kinds of transactions or interactions, and that you should build out what’s right for the channel (or device) and get customers to use that channel (device).


Bank industry retention and attrition rates haven’t improved greatly over the past 15 years. Cross-sell rates have not improved. Loyalty measures have not improved. Cost structures have not been radically reduced.

So what has been the real benefit of the online channel to banking? The added convenience is clearly a benefit to consumers, but it’s hard to pinpoint the benefit to banks. The online channel has become a cost of doing business. 

This seems to be where the mobile channel is heading. Yet another customer contact channel, and a new cost of doing business.


This time around is a little different, however.

It isn’t just about providing greater levels of convenience to customers.

It’s about providing a greater level of value.  Banks and credit unions think they add value today, but they really don’t add that much.  Sure, they provide a loan when it’s needed (assuming the customer qualifies). 

But where is that everyday help?

On Movenbank’s blog, some 20-something writes ~1000 words dispensing advice to other chidults (half-child, half- adult — hey, it was her description, not mine) about managing their finances. 

I could’ve written the post in 5 words: Stop sending so much, chidults.

The important point here is that these chidults are forced to turn to other clueless chidults because banks (and yes, credit unions) don’t do it. Your cute little “safe to spend” chart doesn’t really cut it, banker-boy. We’re talking about a much deeper level of spend management here.

Every chidult has a smartphone. And before long, they’ll all own a tablet. 

If all you’re going to do is give them the ability to check their balances, get an alert, or pay a bill, you lose. It’s “Online Channel” all over again.

You need to make the smartphone the financial transaction device, and the tablet the financial management device. Figure it out. I can’t give you all the answers here. 

Ron ShevlinRon Shevlin is Director of Research at Cornerstone Advisors. Get a copy of his best-selling book, Smarter Bank: Why Money Management is More Important Than Money Movement. And don't forget to follow him on Twitter at @rshevlin.

All content © 2017 by The Financial Brand and may not be reproduced by any means without permission.

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  1. Ron, I agree and disagree in equal parts. The disagreeing part is where we are trying to look at financial management in its current state. We tend to classify transactions vs management based on device capabilities, real estate and the CX they bring – PFM being a classic example. Once financial management converges with transactions through online insights and alerts, relevance of the device ceases – largely that is.

  2. I also agree that different devices will be used for different purposes, but agree with Salil that banks can’t stop developing financial management tools for the smartphone since that is the primary device of choice 24/7 (as opposed to during evenings). I think banks need to provide the type of decisioning (buy vs. don’t buy) insight on phones that makes it easy to determine if a purchase goes off budget, if a reward should be redeemed and/or if I am duplicating a payment already made. I think we need to take a new look at financial management and make the process simple (like Simple is doing).

  3. Financial “management” does not — and is nowhere on a path to — “converge” with transactions.

    The percentage of people who check their account balances, transfer funds, pay bills is high.

    The percentage who categorize their spending and create/manage budgets is much lower.

    The percentage who analyze their investments and savings, who compare their financial lives to other people, who access financial-related educational material, etc. is incredibly low.

    The industry has GOT to stop talking about the integration of PFM w/ online banking. No one freaking wants it, because so few people want to do those PFM-related things.

  4. In its current form that is true but its because PFM is made into a DIY analysis tool. When embedded within the transaction itself as a pre and post event insight, why shouldn’t it be doable on a smartphone. I’d like to look at transactions and management as a venn diagram. So yes, there are elements of the management which are probably tailored only for specific devices but the overlap will increase as time goes.

  5. @RonS: Completely agree with you. You call it “right-channeling”. In my 3-part blog post (, I’ve borrowed the term “omnichannel” from the retail industry to refer to the same thing. Point is, channel strategy should recognize the strengths of individual channels and build out functionality accordingly instead of enabling everything in every channel and not making anyone happy in the process. Talking about mobile banking, my oft-expressed view – not sure if anyone has bothered to give it a thought 🙁 – is that it should leverage camera, GPS, accelerometer, bluetooth, voice recorder and other standard specs of a smartphone to provide functionality that is simply not possible in the online or physical channel. Mobile RDC, turn-by-turn navigation to the nearest ATM – these are a couple of such features that come to mind that are actually offered by some banks in their mobile banking offerings. The list has to grow before mobile banking provides enough compelling value that customers pay for it. That’s the only way mobile banking will cease being table stake and start fetching additional revenues for banks.

  6. If all you have is a laptop, that is your device of choice. If you have a laptop and a smartphone, maybe your smartphone is more for transactions and your laptop is more for deep analytical research and management of your finances with a personal financial management application. Maybe you have a desktop computer, laptop, tablet, and a smartphone. If you have grip (by banno) on your smartphone, you might end up doing all your financial “stuff” on your phone: Your transactions, your decision as to whether you should buy an item in the store and see if your over budget, personal financial management. Or, you could wait for a laggard company like Simple or Movenbank.

    My point is, I think your point is wrong. Smart phones are not just for transactions and tablets are not just for financial management. We need to plan for mixed use.

  7. And if all you have is a bicycle, I guess you could put snow tires on it, strap on an engine, and try to take it cross-country.

    Or you could take a vehicle more suited for the job, like an airplane.

  8. The continuing increases in consumers without banks accounts, consumers with bank accounts who also use non-bank financial providers and the consumers abandoning banks demonstrate the rise in transaction-based financial services over traditional, deposit-based banking. Consumers are realizing that by disaggregating their financial needs, they can use non-bank financial service providers to reduce the overall cost of meeting their financial obligations; receive better service; and regain control over their finances by performing financial transactions when, where and how they want.

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