Bank of America Cannot Afford to Fall Behind the Mobile Banking Curve

Consumers now consider mobile banking to be as important as ATMs

Jun 13, 2014 at 7:00AM

Wikimedia / victorgrigas.

Even though consumers' hunger for innovation in mobile banking continues to increase, banks are not keeping up with the demand. For Bank of America Corp. (NYSE:BAC) this trend could be particularly troublesome, since at least one of the areas in which it previously excelled is losing favor.

In addition, its slow rollout of updated mobile apps may have irked some customers, since outdated apps can be a security risk – something consumers are still nervous about.

Once a frontrunner, now losing ground
Bank of America has been holding its own with mobile banking, and was one of the first banks to create banking apps for tablets, as well as smartphones. In its annual report for 2013, the bank noted that it had 15 million mobile banking accounts as of the first quarter of this year, up from the year ago count of 12.6 million. 

But B of A may be falling behind its peers. Though it won top awards in a Javelin Mobile Banking study last November, a more recent Forrester survey chose JPMorgan Chase and U.S. Bank as co-winners of the top spot. Though the report noted that all the big U.S. banks performed well with the basics of mobile banking, the two winners stood out for innovations missing from the rest of the industry. 

Two problems specifically affect Bank of America. One is the fact that tablet banking, an area of innovation for the bank, is not the driver it was once thought to be. The other is that B of A was somewhat slow with its recent banking app updates for Android and iOS, something that can compromise security. The latter issue is still huge for consumers: According to the Federal Reserve's recent Mobile Financial Services Report, 69% of those polled who do not currently use mobile banking cite security concerns as the reason. 

Overall, banks need to keep up
Bank of America isn't alone when it comes to lagging a bit in the mobile banking arena. A recent research report from MyPrivateBanking noted that banks worldwide are slow to keep up with the desires of their mobile banking customers. Innovation is slow, and security problems still exist, with only around half of the banks surveyed meeting the strictest of privacy standards. 

Keeping current is important for all banks, but particularly so for Bank of America, since customer loyalty hinges on the ability of a bank to offer coveted mobile offerings. A survey regarding banking apps found that a customer's experience with mobile is influential on his or her decision to stay with a particular bank. One-third of respondents felt that way, while 32% noted that the online experience was just as important. 

With its reputation still in tatters after the subprime mortgage meltdown, making certain that it stays current on its mobile services platform would be win-win for B of A. The bank will not only gain recognition for innovation, but will also be fostering customer loyalty – something it sorely needs to address.

These stocks beat the big banks...
Here's your chance to pocket big dividends. Over time, dividends can make you significantly richer. And guess what? The big banks are laggards when it comes to paying dividends. So instead of waiting for a cash windfall that may never come, check out these stocks that are paying big dividends to their investors RIGHT NOW. Click here for the exclusive free report.

Amanda Alix has no position in any stocks mentioned. The Motley Fool recommends Bank of America. The Motley Fool owns shares of Bank of America and JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information