Nearly half (43%) of community banks will offer mobile payments to customers by 2015, according to the 2013 Independent Community Bankers of America (ICBA).
The survey reveals that 37% of community banks offer mobile payments, while another 43% intend to offer mobile payments to their customers by 2015.
“The 2013 ICBA Community Bank Payments Survey confirms what we are seeing anecdotally in the marketplace—that community banks are increasingly offering mobile banking services to meet the evolving needs of their customers and enhance overall customer service,” Viveca Y. Ware, ICBA executive vice president, regulatory policy, said in a press release. “The survey also reveals that community banks are increasingly seeing payments as a relationship-builder—something that is right in line with the community bank relationship lending model.”
Larger community banks are leading the way in mobile banking, with 54% of banks with $501 million or more in assets offering mobile payments. Community banks with $251 million to $500 million in assets are not far behind, with 46% offering mobile payments.
Community banks also see payments as a way to build lasting customer relationships. Only 59% of community banks indicated that increasing profitability is one of their most important payments strategies. While 55% of community banks continue to see payments as a source of efficiency, a greater number now see payments as a way to improve customer service.
“Community banks, by definition, are customer and community driven,” said Samuel Vallandingham, president and CEO of the First State Bank in Barboursville, W.V., and chairman of ICBA’s Bank Operations and Payments Committee. “According to this year’s survey, most community banks set their bank’s strategic direction in payments by listening to their customers.”
Here are some other key takeaways from the study:
The percentage of community banks experiencing payments revenue growth increased more than those that achieved revenue growth (36% versus 31%)
Increases in revenue are mostly driven by business payments products. Community banks with less than $100 million in assets were least likely to experience revenue increases this year and were most likely to experience a revenue decline
Electronic person-to-person payments (P2P) are now offered by 40% of community banks. Another 28% of community banks planned to implement P2P in the next two years, with higher rates of planned deployment among larger institutions
The implementation of consumer remote deposit capture (RDC) seems to have peaked among community banks overall. The results suggest that many banks have determined that the risks related to this product outweigh the rewards, while others seem to be waiting for the product to mature before making the decision to offer RDC to their customers
Debit cards continue to be seen as essential to community banks’ customer relationships, with 99% rating them as important and 87% rating them as very important
Nearly every bank surveyed was affected by debit card fraud losses, with 94% indicating they have suffered a monetary loss due to debit card fraud. The percentage of respondents reissuing debit cards as a result of these losses, however, was down to 84% in 2013, compared with 92% in 2011.