A new study finds that almost half of the top 100 financial institutions offer mobile banking services.

Surprisingly, this activity is not concentrated among the top 25 or even top 50 banks, with many smaller banks actively utilizing vendor capabilities to offer mobile services. Of the top 100, 43 percent offer access via mobile Web, while 32 percent offer SMS banking and alerts and 32 percent offer applications.

“The findings represent the overall importance of the mobile channel and the current emphasis on having a successful consumer mobile experience,” said Paul Grill, partner at First Annapolis, Linthicum, MD. “The study focused on a group of large banks and credit unions.

“I think the study shows the direction of the industry is pretty clear,” he said. “Mobile will be the channel to speak to consumers on a go-forward basis.

“Mobile will soon be a must in order to keep up in the competitive financial services environment.”

First Annapolis is a management consulting and M&A advisory firm focused on the financial services industry with a specific emphasis on payment-related products, services and delivery.

Mobile banking can make or break you
Mobile banking services are table stakes, not only for the largest banks in the country but also for regional, state and community banks, per First Annapolis.

Several core features, such as balance inquiries, come standard with nearly all mobile banking offerings.

Advanced mobile features are compelling, but still rare, the study found.

For example, mobile remote deposit capture, which saves consumers time and may help lower branch costs, is still not widely available.

Chase recently released the service en-masse via its application. Previously, USAA was the only other major financial institution to offer the service.

Risk management
Measures vary among the banks in the study as they attempt to balance ease of access and risk management.

An emerging innovation specific to the mobile channel is the use of a numeric pass code to login via mobile instead of entering an online banking username and password.

A significant portion of mobile banking providers have dedicated smartphone applications, the vast majority of which are available on the iPhone and other Apple mobile devices via the iOS platform.

Of the 54 banks that offer mobile banking, nearly 60 percent offer a dedicated smartphone application for their mobile banking service.

Apps
A whopping 40 percent of banks that have dedicated applications for mobile banking offer more than one type of application – ING, PNC, American Express – for different forms of interaction.

Just six banks offer a dedicated iPad-specific application. Chase was the first bank to do so.

None of the smallest 25 banks offer Android support. Only three banks have a Palm application.

Some banks such as SunTrust have entered into agreements with handset companies to have their application come standard on phones in core geographic markets.

A few banks like KeyBank have applications that only redirect to their mobile banking Web site. Many banks that currently have applications began with Web site-linked only applications.

Payments not quite there
Most advanced payment features are not yet prominent via mobile, but more financial institutions are distinguishing themselves with unique capabilities and wallet-like features.

Several banks are utilizing mobile as a new channel by delivering services such as remote deposit capture that are tailored to the mobile or on-the-go environment.

More banks are offering person-to-person capabilities: Enables the transfer of funds to others using an email address and phone number.

USAA and Discover recently announced they would utilize PayPal’s platform for P2P payment services.
 
“Mobile banking is definitely growing and becoming more diverse,” Mr. Grill said. “Going forward, mobile will expand out into other financial institutions besides the top banks.”