Some smaller banks in New England are taking advantage of new technologies like mobile banking as a way to woo and keep younger, tech-saavy customers.

Red Gillen, a senior analyst at Celent, the Boston consulting firm, said “mobile banking is good for transactions that won’t wait,” like doing a balance inquiry while waiting in line at the grocery store. Consumers can use several mechanisms on their phone to contact a bank with mobile banking – text messaging, a Web browser, or a specialized application.

As phones become more sophisticated and more people begin carrying wireless devices like BlackBerries the interest in these kinds of services will continue to grow, the bankers said.

Now is a great time for small banks to get involved in mobile banking, said Jay Spahr, senior vice president of e-commerce at Salem Five Cents Savings Bank, because the technology has evolved and more and more customers have phones and devices that can use the service. Salem Five began offering mobile banking in April 2007.

Mobile banking can offer several advantages to a bank, Gillen said. The first is cost savings, since these mobile inquiries often replace calls to a call center. The second is the attraction and retention of younger customers who are expecting, more and more, to be able to use their favorite tech tools to deal with their bank.

Growth Spurt

According to a study by Celent currently less than 1 percent of banking customers use mobile banking. However, the group expects that number to change dramatically with 30 percent of all retail online banking households using mobile banking by 2010.

“We have to catch them as they grow up,” said William J. McGurk, president and CEO of Rockville Bank, a Connecticut community bank that began offering mobile banking this summer.

Darlene S. White, senior vice president of Rockville Bank called the new technology “the ultimate convenience” because “you’re not always sitting at your desk.”

But Gillen said this technology won’t replace online banking, call centers, or brick-and-mortar branches – it’s just another form of communication for customers that are increasingly expecting to be able to conduct business whenever and wherever they want.

Customers can do almost all the same tasks on their phones that they currently do online, including checking balances, transferring funds and paying bills. However, Spahr said that as a risk management feature Salem Five currently does not allow customers to create a new bill payee using the mobile service, only to pay existing ones.

So far the larger, national banks like Wells Fargo and Bank of America have taken the lead in providing this service, but that is changing. Gillen said he has a list of about 100 small banks that currently provide this service nationwide, and that number is growing as more banks see the appeal.

“We’re not afraid to go out into a new market where we think there’s an opportunity to expose our clients to new and different technology,” Spahr said, explaining why Salem Five chose to be among the first community banks to offer this service. “We think wireless has got a huge future.”