Looking to make up the revenues lost as a result of new consumer protection rules put into place this fall, banks are reportedly considering a host of new fees, including ones for mobile banking services.

Banks have wholeheartedly embraced mobile because it is a cost-effective strategy for them although consumer adoption is still low. With several banks reportedly considering adding fees such as a $5 charge for remote deposit capture, the question is how this will impact the adoption of mobile banking services.

“Increasing mobile banking fees would certainly slow consumer adoption of mobile banking services,” said Jennifer Canfield, financial services senior associate at Web traffic analysis service Compete Inc., Boston.

“Because mobile banking awareness, adoption, and intent to adopt are all low and because mobile banking has a high ROI, banks should focus on building awareness and encouraging adoption, not putting up more barriers,” she said.

“Banks can encourage mobile adoption by fixing the infrastructure limitations, promoting security, and above all providing incentives. Partnerships where banks, card issuers, and retailers provide real-time shopping rewards and incentives provide the incentive consumers need to try the technology.”

Adoption is low
The current rate of adoption for mobile banking is low and any additional fees might scare away consumers who already are not sure if they need the service.

According to Compete, 54 percent of bank account owners have used a mobile device to manage their checking and savings accounts in some way but only 11 percent of bank account owners have used remote check deposit.

The majority of banking services being used are basic ones such as checking balances.

“What we hear from consumers is that they aren’t all that interested in these services,” Ms. Canfield said. “One of the top reasons consumers don’t adopt mobile banking is because they feel they simply don’t need to do this,” she said.

While there are no examples so far of banks charging for mobile services, there are numerous reports that banks are looking for ways to make up losses caused by new the rules and that mobile banking is one area of possible focus for new fees.

“I have not seen any specific implementations or examples of this, but I do believe that banks are trying to seriously reevaluate the services where they might look to charge in future in order to bring in new revenues,” said Bjorn Hildahl, vice president of product management at Kony, Orlando, FL.

Revenue opportunities
Huntington bank offers mobile banking services says it will continue to keep these services free to use for consumers.

“I don’t think [mobile banking fees] would be tolerated by consumers,” said Jeff Dennes, online and mobile services director of Huntington, Columbus, OH. “They are used to getting access to their accounts for free in all channels and it would be very difficult to justify why the mobile channel would cost while others are free.”

Banks are looking to mobile help generate revenue and will consider a variety of new mobile services that could bring in new revenues.

“Banks will look to mobile banking to generate revenue for sure, but they will also look to save costs since the ROI on call center deflection, cost-effective deposits, etc. is already very compelling,” said Drew Sievers, CEO of mFoundry, Larkspur, CA.

“On the revenue front, however, we are seeing banks looking to new features like offers delivery, peer-to-peer money movement, international remit, etc. to drive their top line growth.

If the fees are small enough the convenience provided by mobile banking could outweigh the costs in the minds of consumers not like when banks tried to introduce ATM fees several months ago and there was an outcry from consumers.

It all depends on what fees the banks choose to charge and the perceived value to the customer.

“The core tenant of mobile banking is the cost of convenience for the customer,” Kony’s Mr. Hildahl said.” For example, if the fee for remote capture deposits via mobile are nominal, and it is still more convenient or cost effective than driving to the bank to deposit a check, customers will pay.

“This was obviously not the case when banks tried to charge ATM card usage fees – from a consumer point of view, there was no additional value. Mobile has a very different convenience factor,” he said.

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York