According to a recent report by Bank of America (NYSE:BAC), mobile banking is really starting to go mainstream. The bank currently has about 15 million mobile banking customers, and they claim to be growing this number by around 200,000 per month.

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Brian Katt

While it doesn't look like mobile banking will replace branch visits anytime soon, it could definitely result in cost savings for the banks. Here's why Bank of America and its peers could see their margins widen because of increasing mobile banking use.

How the bank makes money from mobile use
The vast majority (81%) of mobile banking users check their balances with a mobile app, and about half use their mobile apps to transfer funds between account and pay bills.

However, features like these have been available on the bank's website for years, and won't necessarily save or make the bank any money.

Where the potential lies (for now) is in mobile check deposits. When customers use mobile check deposits, it reduces the need for employees to handle the transactions, and also reduces paper costs for the bank. In fact, according to one report, a teller-assisted check deposit costs banks about $4.25 on average, while a mobile deposit costs just $0.10, or nearly 98% less.

Bank of America's customers already deposit more than 170,000 checks per day via Mobile Check Deposit, so this means the company is already saving more than $700,000 every day through mobile check deposits. This translates to more than $250 million per year.

So, if the bank could double the use of their mobile deposit feature, it could mean another quarter billion in savings, which would increase the bank's annual earnings by more than 3% (based on 2013's annual results), just by getting more customers to take pictures of their checks.

Currently, only about 38% of mobile banking users deposit checks regularly via a mobile app. 27% of people say they simply don't have any checks to deposit, so this leaves 35% of Bank of America's 15 million mobile banking users to convert. These customers say they either don't understand how mobile deposits work, or prefer physically handing deposits to tellers. However, once these hurdles are overcome, the convenience and ease of the service speak for themselves.

The challenge
Bank of America's challenge is getting people to try mobile banking for the first time. Once that happens, the services seem to sell themselves.

According to the survey, 62% of people have at least tried mobile banking. The impressive statistic is that 90% of those who have tried it are now actively using the apps.

So, between the 35% of existing mobile customers who could conceivably start using mobile check deposits, and the 38% of customers who have never tried mobile banking, there is easily the potential to double the mobile deposit volume.

The potential is huge
While a 3% boost in earnings would be nice, it doesn't begin to express the long-term potential of mobile banking.

The concept of mobile payments is yet to really catch on. Imagine if you could open Bank of America's mobile banking app and scan the screen like a credit card to pay for anything you want. Certainly with the recent security concerns about using a credit card, something like this would be a viable alternative.

Whether this happens or not, the point is that mobile check deposits are just beginning to scratch the surface of what banks could potentially offer through your smartphone. Every thing the bank figures out how to get people to do through a mobile device means less employees, less materials, and fewer facilities will be needed to operate.

So, while the current rapid growth in mobile banking customers is saving Bank of America some money, the current savings pales in comparison with the value of building up a loyal base of mobile banking users.

Matthew Frankel has no position in any stocks mentioned. The Motley Fool recommends Bank of America. The Motley Fool owns shares of Bank of America. 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.