The young and the affluent are the mobile banking industry's most important demographics.

In the U.S., mobile banking is catching on among the industry’s two most important demographics: the young (who have yet to establish their banking brand preferences) and the affluent. A Federal Reserve Board survey finds that 48 percent of U.S. smartphone users have used mobile banking tools, up from 42 percent in 2012. Mobile banking now comprises around 8 percent of transactions, per The Wall Street Journal. And while many have yet to start using camera phones to deposit checks, banks are experimenting with other new and novel means of integrating into the mobile experience. Among them:

  • Photographic bill payment: Much like the automated deposit that allows people to take a picture of a check via a bank’s smartphone app, Texas-based First Financial’s app pays bills simply by using a photograph of the stub. U.S. Bank’s new mobile app has a similar capability.
  • Biometrics and voice recognition: Why remember log-ins (and type them on those small screens) when technology can identify you through your voice or fingerprint? In addition to authentication, voice recognition can also enable speech-driven transactions. ING Direct Canada is testing both these voice applications.
  • Facebook integration: ING Direct Canada is also enabling customers to view accounts directly through Facebook and plans to eventually integrate transfers, bill payments and the like. Russian startup Instabank (which has global aspirations) offers accounts via Facebook signup. The Commonwealth Bank of Australia and GT Bank in Nigeria are also using the social platform for banking services.
  • Cardless ATMs: We’ll see the mobile phone starting to replace the ATM card, with consumers able to “pre-stage” a transaction. Banks in Japan and parts of Europe and Africa are enabling cardless cash withdrawals; in the U.S., JPMorgan Chase is planning to introduce the capability.
  • Skype: While consumers are increasingly comfortable with mobile and online banking, complex transactions are usually reserved for face-to-face encounters. Enter Skype and other means of video communication. For instance, Bank of America recently introduced ATMs with video displays that enable communication with bank employees.

Although mobile banking is the wave of the future, many consumers will remain wary. Thus, as ING Direct Canada’s Charaka Kithulegoda says, “You have to give the customers choice, whatever platform they want to interact with us.” Meanwhile, don’t expect brick-and-mortar branches to disappear just yet—but watch for them to start looking quite different, as more remodel for a new age of banking.

Image credit: Commonwealth Bank