Global Retail BankingBII

KEY POINTS

  • Worldwide, mobile banking is now more popular with bank customers than visiting brick-and-mortar branches. Fifty-seven percent of customers do their banking online on a weekly basis, while nearly one-fourth use mobile banking weekly (up 9 percentage points from 2013). Only 14% visit a bank branch every week. Mobile is completely changing the customer-bank relationship. (See chart, above.)
  • At the top three banks in the United States, about half of all online customers also use mobile banking. Now that active mobile banking users have reached about 50% of online customers, growth in adoption is slowing, following typical tech adoption trends.
  • To keep up with growing mobile banking usage, worldwide investment in mobile banking is rising robustly, at a compound annual growth rate of 14.6% between 2013 and 2018, according to BI Intelligence estimates. That's three times faster than growth in banks' overall tech spend. Top mobile banking activities include checking balances, transferring funds, and depositing checks.
  • Large retail banks have a lot at stake as they try to court mobile-centric millennials in particular. The next generation of banking consumers is less satisfied with its banks than older age groups and is willing to bank with non-traditional financial institutions.
  • Offering mobile services like mobile check deposits is the minimum banks can do to stay on the cutting edge of the revolution in banking and attract tech-savvy customers. There are also opportunities in payments in the form of mobile wallets, wearables, peer-to-peer payments, and international remittances.
  • Overall, the traditional banking business is still healthy in the U.S., so the decline of bank branches is due entirely to consumer preferences. Deposits at U.S. banks have been growing at a compound annual growth rate of 7.6% annually over the past 13 years, but the number of bank branches has remained flat for the past five years, and the number of bank employees is in decline.

The Evolving Retail Banking Market

Retail banking is in the midst of dramatic disruption primarily brought on by online and mobile banking technology. As a result, the [...]