Just this week, Bank of America (NYSE:BAC) CEO Brian Moynihan said, "If you have a smartphone in your pocket, you have a bank in your pocket."
While that may sound a touch terrifying, it is a good thing for both consumers and the biggest banks.
A study from the Federal Reserve in March noted that number of customers who used mobile banking platforms was up from just 21% last year to 29% and noted that "[t]he use of mobile banking has increased by more than a third in the past year, and it appears likely to continue to increase as more and more consumers use smartphones."
Keynote, a marketing firm, recently released its mobile banking scorecard, which ranks the banks with the best mobile banking capabilities. Bank of America and US Bancorp (NYSE:USB) tied for third, behind Wells Fargo (NYSE:WFC) and JPMorgan Chase. Bank of America placed highest in functionality, while Wells Fargo led the way in the category of "Privacy and Security." JPMorgan Chase was the leader in both the both "Ease of Use" and "Quality and Availability" categories.
Of course, having a quality product is good for everyone, and as advances in mobile technology continue, the benefits to be had will only expand.
The benefit to consumers
The benefit to consumers is enormous --from the obvious, like having information surrounding your balances and recent transactions at your fingertips, to the more obscure reality that there is a significant amount of time saved if you no longer have to drive to a bank to deposit a check. Simply with a signature and two pictures, you can add money to your account.
Yet it's good not only for those consumers who use the mobile banking platform, but also those who don't. The lines in front of tellers everywhere now are shorter, since the more routine things can be completed on phones -- allowing tellers to better assist customers who need more expansive help.
Bank of America recently noted that nearly 13 million deposits (roughly 8% of its total) in the third quarter were made on smartphones, which will in turn lead to shorter waits for those people who truly need to be served. The benefits expand beyond those with smartphones, to all of a bank's customers.
The benefit to banks
The benefits are not exclusive to customers. Banks are set to benefit as well from the increased use of technology. Bank of America notes that it costs roughly 14 times more to serve someone in a branch than if that person uses a phone, and banks everywhere have noted how dramatic the cost savings are when consumers do more outside the bricks-and-motor banks.
But it isn't just a cost-saving maneuver for the banks -- it can drive revenue for them as well. Square and eBay's PayPal service each allow for mobile phones to collect payments, which they generate transaction fees from. Even routine things have also had fees tacked onto them, as US Bancorp even charges $0.50 per check that's deposited using a mobile phone.
The bottom line
As with anything, there are things that are positive and things that are negative with expanding technology. And although customers are more closely linked to the biggest banks now perhaps more than ever before -- since the banks are in their pockets -- the reality remains that mobile banking services are set to benefit us all.
Fool contributor Patrick Morris owns shares of Bank of America and US Bancorp. The Motley Fool recommends Bank of America, eBay, and Wells Fargo and owns shares of Bank of America, eBay, JPMorgan Chase, and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. 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.