Mobile Banking Gaining Ground

June 1, 2008
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GRAND RAPIDS — United Bank began offering mobile banking service to its online banking customers several months ago, giving users complete access to their United Bank accounts via the Web browser and text messaging features of their mobile phones.

United Bank is the first community bank in Michigan to offer mobile banking, noted United Bank Chairman Art Johnson. Johnson said United tends to get in on new technologies earlier than a lot of its peer banks because it has a close relationship with the company that supplies its data processing software and hardware. 

“We do some beta testing for them, so we get an early shot at the latest and greatest. Mobile banking is kind of the next most convenient thing,” Johnson said. “I don’t think I know anybody who doesn’t carry a cell phone today.”

Two groups have emerged as early adapters of United’s mobile banking product: the 25-and-under demographic and the 55-and-over demographic. The first group wasn’t particularly surprising, Johnson said, but the latter was.

“I think what we have there are probably people who are executives and travel a lot,” Johnson suggested. “You wouldn’t necessarily think of that demographic as on the cutting edge of this banking technology stuff, but they’re probably already using technology to keep in touch and this is just one more thing for them.”

There hasn’t been a huge adoption of mobile banking yet because United Bank has largely just been marketing it to its existing customer base — for a couple of reasons, Johnson noted. 

“We wanted to find a little bit about who specifically is using this so we could market it accordingly,” Johnson said. “That’s a bit of a challenge because we don’t know if a lot of traditional marketing channels that were used in the past will work with a group like this, particularly the under 25s.”

At the moment, the space between those two groups is a vast wasteland, but it’s still early in the product’s introduction, Johnson said.

Senior Vice President and Chief Information Officer Tim Lockwood said a lot of it comes down to the type of device an individual uses. United’s mobile banking system requires a user to have a phone with text messaging capabilities and Internet access, which are features most young people already have on their cells. The 55-and-over executive who travels on business may very well have a PDA that’s equipped with text messaging and Internet access.

Presently, mobile banking users can log in and see activity on their accounts. United also offers an alert feature that notifies the customer of each transaction as it occurs.  

“Our bank is applying real time live with all transactions. If you use your debit card at a store, the transaction hits your account within seconds and you’re notified of your account balance. Notifying people of their balance after every transaction is a real plus, especially for younger people because most of them use debit cards rather than checking.”  

Lockwood said United is adding a bill pay feature to its mobile banking product so customers can pay bills and transfer money between accounts over their cell. That feature is expected to become available in July.

United is also planning to introduce a mobile banking product for its business customers with all the same features of the consumer product, plus the capability of initiating wire transfers and originating electronic transactions, such as payroll. Lockwood said the business mobile banking product will likely be in beta testing for a couple of months and then made available sometime this fall.

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