Is mobile banking the next big trend?

Mobile bankers may think targeting upwardly-mobile consumers or Baby Boomers is the right way to go, but according to a recent Yankee Group report, that is dead wrong. The report suggests that low income users and prepaid users are the best prospects for mobile banking.

by Kristina Knight

So far mobile banking in North America has been targeting toward upwardly-mobile and younger users as a convenience service, but the report suggests that these users are not replying to the services in a positive enough manner.

Low-income consumers, however, make up more than 20% of mobile users. These users may not be as tech-savvy as the upwardly mobile, but if targeted correctly could be a better resource for mbankers. However, to get users to log on, bankers must make the interfaces simpler to access and easy to use.

In a related study from In-Stat, researchers suggests that mobile phones will be wallets within the next four years, making mobile banking an even larger force. With the changes in how cell phone work and how they are being used, the report says contactless payments made from cell phones will become commonplace by 2012.

So far the infrastructure is not in place, but it could be soon.

"The groundwork is being laid by a lot of companies really moving toward that, but it will take a while for the infrastructure to get built," said In-Stat analyst David Chamberlain (via MediaPost). "The most important thing now is getting people accustomed to using cell phones for other types of financial transactions."