A young, prosperous generation is becoming increasingly mobile, and its gadget of choice on which to perform day-to-day financial business is the tablet. A handful of banks, led by Bank of America (NYSE: BAC), are frontrunners in this brave new world of banking and will most likely reap the rewards while their counterparts dawdle.
Tablet-based banking is growing by leaps and bounds
A recent study by Javelin Strategy and Research shows exponential growth in the tablet banking market as more and more tablet users prefer to use the devices for mobile banking services. Over the past few months, online banking has quickly been moving toward the tablet and away from home computers, laptops, and mobile phones, particularly with the debut of Amazon's (Nasdaq: AMZN) Kindle Fire late last year. The dearth of banking apps for the device, which uses a custom version of Google's (Nasdaq: GOOG) Android platform, made the going difficult -- all the better for Apple's (Nasdaq: AAPL) popular iPad, for which many apps were available.
Consumers have been making their preference for banking with tablets known for some time. A survey administered last August by Fiserv indicated that fully 40% of online households -- which number 96 million -- could own a tablet before the end of this year. Of those who already own tablets, 45% said that they would like to use them for online banking. Late last year, a study by Oracle Communications pointed out that, of those surveyed, 34% would rather use a tablet than a smartphone for mobile banking.
Given all this information showing how ravenous consumers are for tablets and tablet-based banking apps, banks have been glacially slow at developing apps to make these customers' dreams a reality. After all, why shouldn't they want to nab young, asset-heavy customers making more than $100,000 per year?
Interestingly, the study notes that most of the top 25 banks have apps for both iOS and Android, but very few have customized these apps for tablets. Ever-ambitious Bank of America has apps for both, as well as one specifically for the Kindle Fire, which runs on a custom Android platform. Not far behind is Citigroup's (NYSE: C) Citibank, which released its own Kindle Fire banking app in March. The new app was created by the bank's tech team using the Citibank app for iPad, which debuted last summer.
Fool's take
The obvious winners here are Apple, whose iPad commands 55% of the tablet market, and Amazon, which saw its Kindle Fire devour 10% of the market in just a short time. I would include Google here, too, as Android is also riding the wave of tablet popularity.
Banking giants Bank of America and Citigroup are trailblazers here. They had enough sense to pay attention to marketing data and offer customers exactly what they wanted. Even as other banks jump on the bandwagon, these banks will have already snagged a nice portion of the mobile-banking market, and they will enjoy the cost and customer-service benefits of doing so for a long time.
The explosive growth in just the mobile-banking sector shows how lucrative the mobile-technology market really is. Our free report will show you just how to cash in on this spectacular opportunity, so be sure to check it out today!
