NEW YORK (TheStreet) -- From fingerprint identification technology to GPS-guided directions for nearby ATMs, banks are packing more and more features into mobile-device apps, both to attract younger users and cut costs.
There's a paradox inherent in the trend, however. The focus on glitzy mobile services is overshadowing the traditional online banking that remains more popular with customers because of its greater functionality and ease, according to analysts who follow the industry's digital initiatives. Websites still allow customers to handle a wider variety of tasks, from paying bills to reviewing old credit card statements, which means they'll probably continue to dominate the market in the near future.
"There have been far and away more changes on mobile apps than on websites" in the past year, while innovation on websites has been slow, said Alex Filiaci, a senior analyst at New York-based consulting firm Corporate Insight. The firm tracks websites for 17 major banks such as Bank of America (BAC) and Capital One (COF).
"You can do pretty much everything you want to do already on the web, whereas mobile, there's still room to add more functionality to the apps," he said.
Besides attracting younger users and offering cheaper alternatives to traditional brick-and-mortar branches, mobile platforms appeal to banks because it offers them a chance to start anew on the digital front, Filiaci said.
"The banks are bogged down by the fact that they have these legacy [online] systems that they'd rather update piecemeal than wholesale replace," he said in a telephone interview. "Mobile was a fresh start for them, so they could come in with a new design concept."