The use of mobile banking -- consumers accessing bank services using a mobile phone -- continues to increase, according to an annual survey by the Federal Reserve Board.
Forty-three percent of all mobile-phone owners with a bank account used mobile banking in 2015, according to the recently released survey. That was up from 39 percent in 2014 and 29 percent in 2012.
But the use of mobile banking is more prevalent among customers of at least one Arkansas bank.
Fifty-one percent of all Arvest Bank households used their cellphones to access bank services last year, the Fayetteville-based bank said. That is almost three times more than the 18 percent of Arvest customers in 2012 who used mobile banking.
The most common way customers interact with a bank or credit union is to visit a branch -- 84 percent of customers indicated they spoke with a teller during the previous 12 months, according to the Federal Reserve study.
The frequency with which its customers visit branches has decreased over the years, Arvest said.
Last year, Arvest customers made an average of 37 teller transactions per household, down from 46 in 2011. Arvest said it serves more than 710,000 households.
The Federal Reserve study shows that the main reason some customers choose not to use mobile financial services is that they prefer other methods of banking and making payments. The customers also cited concerns about security.
"Mobile banking is where the future of banking is," said Garland Binns, a Little Rock banking lawyer. "It is one of the spokes that all banks have to have in their wheel."
The increased use of new technology is a challenge for small community banks, Binns said.
"Besides complying with regulatory requirements, there are now so many other new things coming along, like the technological changes, that it makes it difficult for community banks," Binns said. "The younger generation will gravitate to those financial institutions that offer what they want."
Arvest, which has more than $15 billion in assets, realizes the role of branches will evolve, Arvest spokesman Jason Kincy said. The bank has 270 branches in more than 120 communities in Arkansas, Oklahoma, Missouri and Kansas.
"As this shift in consumer behavior continues, we hope to be able to offer more robust services in our branches," Kincy said.
Instead of customers just making withdrawals and deposits at branches, Arvest is considering helping its "customers with their financial needs from a more holistic standpoint, from budgeting to planning," Kincy said.
So the way Arvest builds, staffs and manages branches likely will change over time, Kincy said.
Arvest promotes its high-tech services in several ways, including online, through social media and at the point of opening a new account, Kincy said.
"We also generally will have signage or merchandising in many of our branches and ATMs highlighting these services," Kincy said.
Most customers expect a bank to have some form of online banking, Kincy said.
"And many of them are used to banks having mobile banking, so you don't have to promote them as much as you may have needed to in the past," Kincy said.
Arvest continues to see consumer preference shifting to nontraditional channels, Kincy said.
The shift includes:
• A 133 percent increase in the number of deposits consumers made at ATMs in the past four years.
• A 95 percent increase in mobile check deposits from 2013 to 2015. To make a mobile check deposit, a customer takes a photo of a check with a mobile phone.
• A 92 percent increase in the number of customers who choose to receive electronic bank statements instead of paper statements from 2011 to 2015, and
• A 79 percent increase in checking accounts opened online during the past five years.
The Federal Reserve's survey was conducted in November and published in March. About 2,150 bank customers responded to the survey, which was conducted online. The Federal Reserve first conducted the survey in 2011.
SundayMonday Business on 05/01/2016
Print Headline: Banking by phone gaining traction