Home Financial Planning Prospects and Challenges of Mobile Banking in America

Prospects and Challenges of Mobile Banking in America

by Amarachukwu
Challenges of Mobile Banking

Mobile banking – The advancement of technology has provided an opportunity for financial services providers to create different financial innovations. One of these innovations is Mobile Banking.

The world has changed significantly in technology, and mobile phones are now essential.

Mobile banking means doing bank transactions on your mobile devices like smartphones, tablets. Mobile Banking allows customers and banks to interact with each other and gives room for different financial transactions.

Mobile banking does not require an internet connection or even a smartphone as customers can still track their transactions via SMS, which is also available 24 hours every day. Since over 7 billion people own smartphones, mobile banking has become more popular among bankers and customers. 

Before the coronavirus pandemic, mobile banking was one of the fastest and easiest ways to go to a bank. Mobile banking offers many services like checking account history, getting alerts of your bank transactions, funding money to other bank accounts, and having access to fast and easy loans and investment plans. 

Mobile Banking in America

Banking in America has gone through many changes, especially since 2007. By 2008, almost all banks started offering mobile banking services. 

Since then, banks in America have been able to provide their customers with more mobile banking apps that will allow them to perform different bank transactions, including transferring money across countries without going to any bank branch themselves. 

As of 2021, an estimated number of 169.3 million people make use of mobile banking, 80% of them prefer using mobile banking to access their bank accounts, and over 63% of the US population makes use of mobile banking.

Benefits of Mobile Banking

Aside from being less expensive, there are many benefits of using mobile banking to perform your daily transactions, and some are;

Banking services are close.

You don’t have to go to the bank to check your bank account, transfer money or even pay your bills. You can do all this via mobile banking and request your statement of account to know how many transactions you have made for that period. You can bank from anywhere, in the car, while playing football, while cooking. Anytime and anywhere.

Security

Most mobile bank apps ask for a password or two-step verification before you can access your account. Some credentials are needed before you can log in to your account. This is to help prevent hackers from invading your account.

Helps in budgeting

Mobile banks now help you track how you can spend and save money. You can also check your balance before you pay to make sure you are meeting up with your budgeting goals.

Depositing checks

Just by taking pictures of the front and back information of the check for rapid deposition without going directly to the bank to deposit it.

Work efficiency

Mobile Banking helps boost productivity for the workers because many problems can be fixed on the app rather than going to the banks themselves and waiting in long lines. So as long as you can perform any bank transactions from the comfort of your home, you are making the job easy for both you and the bankers.

Aside from these benefits, there are other benefits like;

  • Ability to quickly block the card if you notice any attempt of hack or loss.
  • Easy to use even though you are not computer literate. Whether you are new to mobile banking or not, you can learn everything about it just by following instructions.
  • It is always available as long as you have a mobile phone.
  • Transfer of money to anywhere, even if there are no banks nearby.
  • Purchasing goods and services online is more accessible.
  • You can easily reach customer service from the comfort of your home through the customer help desk.
  • Records are easy to find once you go to transaction history.

Challenges of Mobile Banking in America

Before the evolution of mobile banking in America in 2007, banks faced different challenges until smartphones came on board. It was difficult for customers to perform transactions on smaller phones.

As technology in finance progressed, traditional banks began to think of ways of offering accessible services to their customers without them coming to the bank.

Although some banks like Wells Fargo offered mobile banking services in 2022, they withdrew because not many people were interested in it. Though mobile banking has many advantages like saving time and cost, some challenges can mar the smooth running of mobile banking.

System breakdown

Sometimes, there could be a breakdown of the system, which could take like 24 hours to work on, thereby making mobile banking unavailable for that period.

Extra charges and commissions

One of the disadvantages of mobile banking is the high extra charges placed on transfers when transferring to some banks, not talking about the commission. 

Limit of transactions

There are limits of transactions on mobile bank apps for a day and the amount of money to be transferred. Sometimes the app can refuse to perform a transaction which it feels can be dangerous.

Speed in processing payments

Due to network issues, payments can take up to three or five business working days. It is worse if the problem occurs on a Friday. Then you’ll have to wait till Monday since it’s a business day.

Fake bank apps

Hackers have created fake bank apps to lure people into putting their bank information and other details on it. Always check reviews and the number of downloads before downloading any app.

Security

Most mobile banks do not have physical branches, making it hard to feel comfortable banking. This makes customers ask questions like:

  • What will happen to my money if the bank folds?
  • If there is any problem with mobile banking and I can’t reach their customer service, how do I fix it physically?

There is no relationship with the Banker.

If you visit your banks physically, you can develop a relationship with your Banker, but if you are dealing with the Banker via mobile banking, you can be handed over to someone you don’t know. Having a personal banking relationship with one of your branch’s Bankers gives you an advantage if you cannot access your mobile banking service.

Bank apps are available only on Smartphones.

People who don’t have smaller phones find it easier to make check deposits because they cannot take pictures of the information on the check. If the customer does not have a smartphone, mobile banking becomes limited.

Prospects of Mobile Banking in America

With the way technology spreads, mobile banking is experiencing more change and transformation. Customers are using mobile banking for their banking needs, and it is becoming essential for banks to provide more safe and easy methods for customers to access their accounts. 

Mobile banking is helping bank sectors deliver an extensive range of services and ensure that users can complete and perform some level of transactions just by using their mobile phones.

Aside from all these, more prospects are available for mobile banking in the years to come. When we say opportunities in mobile banking, we mean what is in store for mobile banking in the future.

Biometric Authentication

Biometric Authentication was designed to improve the security of data in mobile banking.

Biometrics uses thumbprints, face recognition, voice recognition, iris scan, vein pattern authentication, and others to prevent unauthorized access to mobile apps. 

This means the bank account owner can have access to it without inputting any pin or password. For example, if a customer’s car is stolen, no one can access it except through the customer’s fingerprint or face ID. This helps in extra protection against hacks, unauthorized transactions, and theft.

Research by Juniper Research Forecasts says that by 2025, more than $3 trillion transactions will be done via biometric authentication, which is a rise from $404 billion in 2020.

Artificial Intelligence (AI Chatbox)

The application of different AI in different banking organizations increased due to the COVID 19 pandemic. An Artificial Intelligence robot is software that can answer questions and carry out various tasks, making a response on mobile apps easy instead of waiting for customer care service. Juniper Research Forecasts says that using Artificial Intelligence Chatbox in banking will help save $7.3 billion by 2023, and successful banking will increase to a rate of about 3,150% between 2019-2023.

AI bots will also help increase the rate of technology and modernize AI customer experience in mobile banking in America.

AI bots allow a financial organization to talk to millions of customers simultaneously, in turn helping to ease workloads. AI bots also understand a customer’s financial situation by collecting data that will help improve the customer’s experience. Simply put, Artificial Intelligence Chatbot helps in customer service engagement, bot advice, cyber security(learning patterns of hackers to help prevent future hacks), predicting analysis and preventing future banking threats.

Mobile Banking Apps

Though most banks have mobile banking apps, the existence of mobile apps keeps increasing every day, especially with the COVID 19 pandemic, which forced people to stay at home, making it hard to perform bank transactions from their homes. 

Over 55% of people in America could gain access to their bank accounts via mobile banking apps. Research says that by 2027, the rate of mobile payments will rise to $8.95 trillion. Mobile apps are very reliable for performing fast transactions just from the comfort of anywhere. They make banking more accessible and make the banking experience convenient for customers. It also helps save resources like paper because you can receive online receipts for any transactions.

Machine Learning

This is also part of Artificial Intelligence and is one of the prospects of Mobile B

banking in years to come. Machine Learning makes it possible for a bank to gather information like reviews, transaction history. It also helps banks create profiles for each customer and note customer satisfaction and data. 

Machine learning helps protect against theft and fraud and blocks hackers from gaining access to your personal bank information. Research says that about 25% of financial organizations use Machine Learning to detect and protect against fraudulent activities. It helps in providing accurate reports and evaluates a customer’s economic history.

Blockchain Technology

Every day the number of blockchain transactions keeps growing from 10.98 million in 2016 to over 60 million in 2021. Blockchain is one of the top prospects of Mobile Banking. Blockchain allows people to carry out money transfers without the interference of any third party as it gives room for automatic and decentralized payments. Blockchain technology helps keep records of all transactions, thereby increasing the security of banking transactions.

Cardless ATM withdrawal

This is one of the most accessible prospects I’m mobile banking. Just by QR scanning, one can make transactions on ATMs. This means that people can access their funds just by scanning the QR code on their smartphone screen. Once your identity is verified on the mobile banking app after the scan, you will then be able to complete your transaction. Cardless ATM withdrawal also helps prevent hackers from duplicating ATM cards or having access to the numbers on ATM cards. Banks in America like Chase, PNC, Wells Fargo, Bank of America have provided this prospect of cardless ATM withdrawal.

In conclusion

Mobile banking in the financial sector is experiencing colossal technology transformation and progress in the years to come. Using these mobile banking prospects makes banking more accessible and can be done from anywhere with no barrier. It will also help reduce fraudulent activities and increase customer satisfaction and productivity on the part of the bankers.

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