I dreamed I was the Chief Executive Officer of a bank somewhere in the middle of New York State, where the mountains are rounded and green at the top. I was in a budget meeting for 2013 and I didn’t know what to do. How should the bank’s 2013 budget be allocated? All the division heads of the bank were sitting around a conference table with me: lending, IT, retail, commercial, small business, cards, compliance, treasury, etc. They wore suits. They sat, hands folded in front of them, looking at me, awaiting the word on how much each would get. There was silence, and then I heard an ice cube in one of the glasses on the table crack as it melted.
And this made me thirsty. Which made me wake up. Which made me realize that the last place I would like to be is at that conference-room table, because setting the budget is easy; telling some of those people around the table that they are no longer needed is not.
Which brings me to new data that Bank Innovation has received on the usage and usage patterns of mobile banking platforms. Two new indexes from Malauzai Software, which provides mobile banking solutions to around 60 banks and credit unions, point to the engagement consumers have with their mobile banking and the actual transfer of funds via mobile banking. I could tell you the numbers, but are they really important? What is important is that there exists at all an index for mobile banking engagement and mobile money movement. The implication is this: mobile banking is not at the “what’s the potential” stage; it is at the “how pronounced is it” phase. A portion of banking will be forever more conducted via mobile device. Those folks sitting around the desk in my dream had better wake up to that fact.
To be sure, the data, which is based on 55,000 users and 475,000 logins in October, is new. The mobile engagement index, which indexes how much consumers are using mobile banking elements, climbed 3.37 points in October to 129.04. Now this index was at 132.93 last May – that it declined since then is hard to grasp. The way we understand this index is that is measures usage, and as Malauzai makes its software more efficient, meaning that it requires that consumers use fewer “clicks” to accomplish tasks, the overall index might decline. But we still make clear the reality that mobile banking elements are being used with frequency and consistency. Remember, the average user of Malauzai Software logged on to its mobile banking platform 8.64 times last month. We will not bother comparing that to bank branch visits per customer per month.
The mobile money index, which measures mobile money transfers and actions, offers a similar lesson. The index actually declined 88.00 points to 251.4, but still implied that consumers are, for example, making an average of two remote-deposit-capture check deposits per month. Some consumers, mobile or not, make no more than two check deposits per month.
While there is something a bit unsatisfying about this data, mainly in that a long time series is require to more fully put the numbers into perspective (Bank Innovation will continue to monitor these indexes in the coming months), the fact that mobile banking is measurable in a way that perhaps branch banking is not deserves particular mention. There is a decidedly real population of consumers that have shifted their banking practice to the mobile channel – and I don’t mean some of their practice; I mean all of it. That’s a reality some in banking have yet to wake to. As soon as I fall back asleep, I’ll budget for it at my “bank.”