The Future of Banking: The Mobile Banking Revolution

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The Future of Banking: The Mobile Banking Revolution
Brett Lord
Florida Institute of Technology
Strategic Management
BUS5480
Professor Uchenna Nwabueze
March 24, 2013

Abstract
Mobile banking changed the landscape of personal banking. As the Internet became more ubiquitous and smartphone and tablet use is increasing, the desire for consumers to conduct their banking on the go grew exponentially. Financial institutions are expanding the services offered through mobile banking to attract younger customers as well as reduce costs. In an effort to reduce costs, banks are investing in technologies to change the banking landscape with do-it-yourself banking, teleconferencing with customers, eliminating paper, and reducing branch size. Regardless of the technology to be introduced in the future the banking industry has been inexplicitly changed by it. Keywords: mobile banking, online banking, banking

The Future of Banking: The Mobile Banking Revolution
Mobile banking changed the landscape of personal banking. As the Internet became more ubiquitous and smartphone and tablet use is increasing, the desire for consumers to conduct their banking on the go grew exponentially. Now consumers could bank 24/7 eliminating the need to visit their local branch. Today's consumers are Internet-savvy and want the convenience of checking their bank balances on the fly and performing transactions as quickly and efficiently as possible. In response to the ever-increasing demand for portability and convenience, many financial institutions have been ramping up their mobile banking efforts and coming up with ways to please today's consumers. The challenge traditional banks are having is trying to transform themselves for the consumer who places a higher value on time than local convenience (see Appendix A for a list of mobile banking capabilities). The Future of Banking

Changing Scope of the Banking Industry
Technology is changing how consumers handle and conduct transactions. In Gonzales Ribiero’s (2012) article, more financial institutions are getting into mobile banking to attract younger customers. Almost all banks offer attractive or better interest rates on accounts that are opened online as well as many banks now offer accounts to manage your transactions, financial and investment portfolio, and consolidate your mortgage, credit and other accounts (Dutta, n.d.). Industry Changes

Kissel (2012) writes that since 2008, the world of financial services has been turned upside down. That is especially true of the banking industry, which has witnessed multiple bank failures and scandals such as the "London Whale" incident, in which a rogue trader for JPMorgan Chase cost the bank billions of dollars by making a risky bet on the credit market. In response, government authorities have passed new regulations intended to rein in these excesses. Portfolio Matrix

Appendix B shows the portfolio matrix for the mobile banking segment of the banking industry. The future of banking will be the investment in the expansion of mobile and online banking. The advantage for banks will be the ability to reduce costs. The advantage to consumers is the ability of banks to pass on these savings to consumers. Drivers for Change

In 2012, Gonzales Ribiero (2012) opines that today’s consumers are Internet-saavy and want the convenience of performing transactions as quickly and effectively as possible. Her article discusses two emerging trends in mobile banking: digital wallets and NFC technology. The following are excerpts from her article: Digital wallets and mobile payments. According to Bill Ready, CEO of Chicago-based Braintree, a company that handles online payments for online merchants such as LivingSocial and OpenTable, says the biggest thing in mobile banking is the digital wallet, such as those offered by Google and Visa. With digital wallets, consumers can pay for items using their smartphones. "Digital wallets will actually be much more...
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