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Mobile Banking Expanding in U.S.

Mobile Banking Expanding in U.S.

After years of promise and potential, mobile banking is taking off among U.S. consumers eager to manage their finances on their wireless devices.

Offering mobile services has long been seen as an attractive opportunity by large banks, but it's taken longer than they expected for the technology and consumer acceptance to match the potential. But with consumers becoming interested in doing more with their phones and wireless networks offering enough speed and security to make mobile banking attractive, more and more people are treating their cellphones as extensions of their online banking experience.

Consumers who have adopted mobile banking cite a number of benefits, including the convenience of checking their balances instantly and the ability to pay bills or to make account transfers without having to log on to their bank via the Web. By entering a password and making a few clicks, people can take care of basic banking transactions regardless of where they are.

Mobile banking can also be a more immediate and interactive experience than online or in-person banking, with many banks offering text alerts if your balances are low or if suspicious activity takes place within your account. By registering for the types of alerts you'd like to see on your handset, you can be kept informed about what's going on with your account without the need to log on.

More than 300 U.S. banks offer some form of mobile banking services, and their customer base is expanding rapidly. Researchers from TowerGroup expect the number of mobile banking users in the United States to grow from 10 million in 2010 to more than 53 million by 2013. As the number of users adopting mobile data plans expands in coming years, the number of mobile banking customers will follow closely.

Apps Expanding

The latest variation in mobile banking is the development of specialized applications by leading banks. These bank-sponsored applications allow customers to log on and check their balances, make payments or transfer fund between accounts over cellular networks or Wi-Fi connections. Because the applications match the banks' interfaces and offer a number of security features, customers can be assured they are interacting with their banks and conducting transactions safely.

Some bank applications will help customers who need cash to determine their location and provide directions to the nearest branch or ATM.

SMS Banking

To allow customers without smartphones to enjoy the convenience of mobile banking, a number of banks have introduced text messaging-based mobile banking services. Consumers can register for text alerts about account balances or account activity, and can use SMS messages to initiate payments or transfers.

If a transaction gets too complex for SMS, a customer service representative can contact the user to complete the transaction.

Security Considerations

While customers are understandably concerned about the security of mobile banking, the fact that transactions are taking place over cellular networks or within secure applications provides a greater degree of comfort. Because wireless networks are closed (or can offer secure connections over Wi-Fi), mobile banking sessions are less susceptible than many other forms of e-commerce transactions over the Internet. Because wireless phones typically don't allow browser plug-ins or background processes to operate, consumers who choose safe passwords can be reasonably sure their mobile banking transactions are safe and secure.

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