Is A Great Mobile Banking App Worth The Cost?

Major banks have a problem, though it’s not an uncommon one in today’s online economy: their customers don’t like paying for services. 

This past week, the mobile banking app Simple, which prides itself on courting users who are seeking alternatives to traditional banks, proved this when it released data on its first year of operations. The Oregon-based company revealed it has been able to leverage a no-fee model to attract 40,000 new customers, most of which came from major banks. But, while Simple has developed a revenue model built around this selling point, major banks still rely on traditional transaction fees as a dependable income stream.

So, how can banks raise more fees without alienating customers? A new study has suggested that the key is harnessing the popularity of mobile banking. 

Ath Power Consulting recently revealed that 32 percent of bank customers would be willing to pay for mobile banking services. This figure was up 13 percent from 2012 when 81 percent of respondents said they would not pay for the convenience.

The Boston and Washington, D.C.-based company polled more than 3,200 banking and credit union customers as part of its annual Mobile Banking Study. It also uncovered new data on how much consumers would be willing to pay for a truly great mobile banking app. 

In this Data Point, we’ll take a closer look at the findings and go behind the data to evaluate whether investing in a new mobile banking app would be worthwhile for major banks.

Consumers Don’t Love Their Mobile Banking Apps

One factor driving the increase in consumers who would be willing to switch banks for better mobile banking is dissatisfaction with current banking apps. A sizeable minority of survey takers – 9 percent – said they would be very likely to change banks if they found a superior mobile banking offering. More glaring may be the low number of respondents who said they would be very unlikely to make the switch. Only 25 percent reported that they would be very likely to stay with their bank if a better mobile banking app was offered by a competitor.

How Much Will Consumers Pay For Mobile Banking?

The study found that 19 percent said they would pay between $1 and $2 for the service, while an additional 13 percent said they would pay $3 or more. Both figures were up from the previous year, when these figures were 13 percent and 6 percent, respectively. 

Still, the survey suggests there may be limits to how successful a truly great mobile banking app could be in the marketplace. Though the study found that 75 percent of survey takers had made a mobile payment in the last three months, 25 percent said they either had not or were not interested in mobile payments.

For more of the study’s insights, including information on the features mobile banking app users would find most valuable, click here.


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