As smartphones have exploded in popularity in recent years, many banks have rushed to offer mobile banking services to take advantage of this technology trend.

And customers have responded, as mobile banking is being adopted faster than online banking was a decade ago. Research has found that mobile banking customers tend to be more engaged with their bank than non-mobile customers. As to be expected, millennial customers are the most frequent users of mobile banking, with four out of 10 millennials saying it is important that their bank offer mobile services.

Forrester Research has identified a four-stage mobile banking evolution. The first stage enabled users to perform basic banking functions like checking account balances, paying bills, making funds transfers and depositing checks remotely with their smartphones. In the second stage, intelligence is being added — like where customers are located, which is enabling banks to target offers more precisely while allowing customers to open new accounts and fill out applications using their smartphones.

Subsequent stages of the mobile banking evolution will take mobile product offerings beyond just online banking using a smartphone to tap into the latest mobile technology. Mobile capabilities like motion detection, voice-based navigation, biometric authentication and geolocation will enable community banks to refine their digital marketing efforts even more and offer a wide range of new products and services.

A few of these that are either being developed or have already been introduced are mobile photo bill pay, mobile video chat and secure messaging. Apple is already leading the way into the new world of mobile payment services with ApplePay.

The demand for mobile banking services will only increase in the future with most Americans now using smartphones. It is important for community banks to develop mobile banking strategies to stay at the forefront of the industry as well as the upcoming generations. Community banks that fail to adopt a mobile banking strategy could find themselves at a serious strategic disadvantage soon.