A growing number of people are using mobile phones for banking purposes. Right now, almost every bank out there offers mobile payment and banking options. According to a study by the Federal Reserve, mobile banking is used by more than 65% of the millennials today. Furthermore, according to McKinsey and Co, in the next few years, mobile banking usage by millennials is expected to increase to more than 80%. The advantages offered by mobile banking is the reason the majority of the millennials use it.
Thanks to mobile banking, people can now open new accounts , authenticate their identity, pay bills, sign up for direct deposit, deposit checks by taking their pictures and take out loans via their mobile phones. Moreover, mobile banking has allowed bank account holders to make payments instantly. This may surprise you but mobile banking allows you to get approved for mortgage within minutes. In short, mobile banking has made our lives convenient.
It’s no secret that mobile technology is transforming the world. After all, there are over 6 billion mobile subscribers today. This means that 75% of the world has access to mobile technology. The majority of the people today ‘bank’ on their mobile phones. This means that most of us use our mobile devices to direct debits, set up transfers and check balances. This is major convenience to the consumer but there is far more to come.
The majority of the people in the rural areas of developing countries don’t have access to traditional banking. However, mobile banking is bringing such people into the banking system. Opening a simple savings account via their mobile phone has helped the aforementioned people to invest in education, start a business and survive the bad times.
Mobile banking has minimized the need for brick and mortar branches. In 2015 alone, more than 1500 bank branches were shut down. The reason for this is simple: the branches were considered as an unnecessary financial burden by the banks operating them. Moreover, branches still operating have laid off many of their staff ever since the use of mobile banking became widespread. According to a study by Citigroup, more than 30% of the people working in banks today are likely to lose their jobs by 2025.
In the not so distant future, banks will make changes to their IT systems to allow real time payments through mobile devices. Many economists predict that this will open up the path to new services and products. Mobile banking is the ideal thing for low-income families. When combined with real time payments, mobile banking allows low-income families to avoid the costs of check-cashing services and minimize overdraft fees.
While there are several reasons to use mobile for banking today, the many risks of mobile banking somewhat lower its appeal. Nonetheless, as it gives users the ability to perform banking quickly and conveniently, mobile banking will see a rise in its use in the next few years. In fact, the day isn’t far when all mobile users bank through their devices.