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Banking is a seamless fit with mobile: TowerGroup

The slowing economy has caused consumers to want real-time access and control of assets, resulting in greater demand for mobile banking programs.

According to a study by TowerGroup, mobile banking will take over the mainstream channel by 2013, despite the recent slowdown in the banking industry. Mobile banking usage is estimated to grow from the 10 million active users of 2009 to more than 53 million active users in 2013, comprising an annual growth rate of over 50 percent.

"TowerGroup estimates that approximately 5 percent of banks and credit unions in the United States have live mobile banking solutions or are in the process of developing mobile banking offerings," said Charul Vyas, analyst in TowerGroup's Emerging Technologies, Needham, MA.

"We expect this number to grow in the months and years to come as smaller banks and credit unions move into this space," she said.

Consumers are growing to be more economically self-aware during this economic downturn. As financial issues increase, individuals keep closer tabs on their financial information.

From a broader perspective, smartphones and data enabled devices are revolutionizing the ubiquity of mobile devices.

The lifestyle of the consumer has been drastically altered by the portability of the Web. Along with the economic slowdown, consumers are increasingly on-the-go which makes banking a seamless fit in mobile.

In light of this increase in attention to economic issues, TowerGroup estimates mobile to be a disruptive force in the banking industry.

"Today, nearly all of the top banks offer some type of mobile banking service, be it messaging, mobile browser or downloadable application, or some combination of these modalities," Ms. Vyas said. "We think over time all banks will move to a multi-modal approach, offering two or all three of these modalities, and allowing the customer to use the one that most appeals to them."

TowerGroup suggests that the perfect opportunity for banks to extend services is to use consumers' most personal possession and make mobile an asset in the industry.

The transition into multi-functional mobile devices paired with consumer cravings for information delivered on-the-go make this opportunity an option of the here and now.

The financial services industry has taken quite a hit during the economic downturn. A launch in the mobile direction enables banks to reach new audiences in a period when every customer counts.

The strategy of most banks is a basic extension of services to an existing customer base involved in Internet banking.

However, as we progress, mobile banking will implement more services that can evolve according to customer needs and surpass basic banking functionality. Special services may include balance inquiries, location finders, and intrabank fund transfers.

Towergroup believes that the leaders in the banking industry will be the ones that embrace partnerships and platform integration with mobile financial services.

In order to take full advantage of the mobile channel, TowerGroup suggests that banks become proactive about mobile now.

"Over time, we expect more banks to add features to mobile banking, such as bill pay and funds transfer, and consumers will migrate to these features as well, as they become more comfortable with the idea of using their mobile devices to conduct financial transactions," Ms. Vyas said.