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In addition, its slow rollout of updated mobile apps may have irked some customers, since outdated apps can be a security risk – something consumers are still nervous about.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