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Mobile Banking And Strategic Resource Allocation

February 16, 2012

The Credit Union Times recently released an article titled Mobile Banking Report: Credit Unions Lagging Banks.  In the article, Mary Monahan of Javelin Strategy & Research cautions that institutions that lack mobile banking risk losing valuable customers to those that offer it.  She enforces that many credit unions still do not offer mobile banking apps and that is what users want with a particular emphasis on the younger generation.

There is certainly an argument to be made that the younger generation is faster (not necessarily more prone) to adopt new technologies.  Consider that 45% of those ages 64 to 72 use home banking, compared to 57% of those 18-32 according to a 2009 Pew study; the margin is pretty slim.  The “Silent Generation” may not have been the first to adopt home banking, but technology often catches up with all generations.  Beyond age, a number of other demographic and behavioral factors will play a role in usage and adoption rate within your credit union’s unique market.

The question remains, however, are most credit unions positioned to compete with the technology of the nation’s largest financial institutions? And the more important questions:  Is mobile banking necessary for your unique credit union right now?  If not, when?

A credit union will benefit tremendously by having a deep understanding of its business model (including target market(s), value propositions, core competencies and sources of profitability) when contemplating any new product or service.  In our strategic planning work with credit unions, we encourage credit union leaders to create Decision Filters focused on the credit union’s unique business model to help allocate finite resources.  Few if any businesses can afford to be all things to all people—and with margins that continue to be squeezed by sluggish loan demand and extended low interest rates—strategic allocation of resources is critical.

Source:  Mobile Banking Report:  Credit Unions Lagging Banks, CU Times, 2/7/12

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