You can serve retail banking customers in branches, online and through mobile devices. But good luck getting them to ditch the first two for the mobile option.

New research by Novantas LLC, Forrester Research and others adds weight to an idea being kicked around in the industry: that mobile may have its limits as a way to entice tech-savvy customers, reduce branch use and cut costs. Depending on how it is deployed, it can even result in more phone and branch contacts.

None of this adds up to a Luddite argument against pursuing development of the mobile channel. But it does suggest that, like online before it, mobile's effect on the industry may be more incremental than some of its early proponents have suggested.

"Anyone who thinks mobile is about to replace stuff is wrong," said Madhavi Mantha, head of banking research at Novarica, a Novantas LLC subsidiary. "If banks are going to try to build a business case on diverting transactions, I don't think that's going to be valid."

One illustration of the point: Banks' most tech-savvy customers, an 8% swath of the population that Novantas dubs the "ultraconnected," use in-branch services more than less electronically adept peers. They are also more attached to quality branch service. More than half of the ultraconnected group said they would be reluctant to change banks because they have "personal relationships" with the staff — a significantly higher proportion than among even "branch traditionalist" peers. And only 5% of them list "substandard mobile banking" as a credible reason for leaving a bank.

The results jibe with a recent Forrester analysis finding that, at least to date, mobile's return on investment is "hardly a ringing endorsement of mobile as a significant profit center for banks." Though it advocates continued investment in the sector to keep pace with young clients, the Forrester report concludes that much of the mobile business' promise still rests on "hard to quantify" benefits and "next-gen mobile banking features."

Some, such as Bank of America Corp., have cited mobile reliance as a substitute for at least some branch interactions, but other well-established players do not expect that the technology will diminish the importance of brick-and-mortar. Secil Watson, Wells Fargo & Co.'s senior vice president of mobile, said the company had focused on providing simpler functions to the widest possible audience rather than producing immediate profits.

"Year one, year two is there an ROI? No," Watson said in an interview. "Our intention was not to cause a giant channel shift for customers."

Part of the reason, she said, is that Wells' research shows mobile users tend to simply be heavier users of bank services in general.

"When you look at early adopters of mobile, and follow their behavior through time, we realize they are heavy multichannel customers who are engaged with their finances, sometimes multiple times a day," Watson said. Though that makes servicing their accounts more work, she said, the group's young age and affluence make them compelling customers.

Another executive said it was a mistake to evaluate mobile's current worth in dollars and cents.

"I am always baffled when I go to different conferences and speak on mobile, and people ask, 'What did you put in your business case for mobile,' " said Jeff Dennes, chief digital officer of Huntington Bancshares Inc. "What were your assumptions, what was your benefit?' … But you want to talk about the customer experience, or you're missing the biggest part."

While providing basic services like account balance checks unquestionably shifts some customer contact away from other channels, it may be a mistake to presume that increased mobile use will translate to decreased branch traffic and phone calls. A Javelin Strategy and Research survey of banking customers concluded that those who received mobile alerts from their banks and credit unions, a majority responded by either calling their bank or going to a branch. (About a third logged in to their account online.)

Jim Van Dyke, Javelin's CEO, is careful to point out that customers' mode of response to such prompts varies greatly by bank. Bank of America's customers, he said, were more likely to respond by using self-service tools than those of Citizens Financial Group of Providence, R.I., whose customers had a tendency to head straight to the branch.

The discrepancy suggests that some institutions have woven their services together more successfully than others, he said. Nor should mobile be judged solely on its ability to steer customers toward low-cost contact, especially so soon. The recession slowed the diffusion of mobile devices, and customers are not yet aware of many banks' full array of mobile options.

Citizens, however, said that getting a high online-response rate was not necessarily the point.

"It really isn't about one or the other for us, it's about providing choice," said Martin Bischoff, vice chairman in charge of consumer and business banking for Citizens.

Van Dyke said his research included measuring customer perception of big banks' mobile capacities shortly after JPMorgan Chase & Co. launched an advertising campaign featuring a woman sorting out her finances while doing yoga.

"Chase hadn't introduced anything new, but around the time those ads ran, consumers rated Chase's mobile technology much higher," he said.

Van Dyke concedes that bankers still have not seen as clear a link between mobile investment and returns as they would like. "But they haven't given up hope, and because the adoption is there, they can't afford to pull back," he said.

Even if the Novantas data suggests that is not a risk banks will imminently face, the numbers do not rule out the possibility that it eventually could. Only 13% of smartphone users "most often" check their balance with the device, and even fewer regularly use it to transfer funds, research bank products or resolve a problem. But it is only fair to consider that the population of people doing such things has only in the last few years grown from a base of zero.

"That there was such a high proportion of customers that identified mobile as their favored way to do anything I thought was amazing," Mantha said.

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