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
Cell

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In addition, its slow rollout of updated mobile apps may have irked some customers, since outdated apps can be a security risk – something consumers are still nervous about.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

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers