Use of Mobile Banking is projected to grow three fold in the next three years (Source: TowerGroup). The data traffic at AT&T (courtesy the iPhone) has grown 50X in the last 3 years. Mobile will become a key channel for customers to transact with the bank.
That said, most banks are still tip-toeing their way into mobile banking and many others view mobile banking as a subset of online banking (think about where mobile banking resides within your organizational structure. Often, I have seen this as a subset of the responsibilities of the person/team responsible for the online channel).
I have heard bankers complain that it is very difficult to get funding and prove ROI for the mobile channel. I have also heard the argument that customers don’t really want mobile banking. And finally, some say that they will evaluate the mobile channel once they are “done” with online.
Well, the truth is, that customers have been slow to adopt to mobile banking. Let us first look at some of the issues with the mobile banking adoption rate:
- Service is not differentiated: most banks offer a subset or similar range of services on the mobile as they do on the online channel. Most mobile banking applications today offer transaction viewing, bill payment, funds transfer and ATM locater features.
- Mobile browsing costs: customers had to watch out for how much data they downloaded on their mobile devices as telcos were charging for data usage by the drink. Flat fee unlimited data usage plans are becoming common now.
- Platform Usability: Until the iPhone existed, accessing bank websites through the mobile web browser was a pain in the neck. The iPhone and now the Android powered phones have made the user experience more enjoyable. Add to that, the bank specific phone apps has made the experience faster, feature rich, secure and with a better UI.
- Lack of awareness: many a times, customers are not aware that their bank offers mobile banking either through text, web or applications.
There is a strong case for Mobile Banking ROI. On the costs side, a call center transaction costs the bank $3.75, an IVR transaction costs $1.25. A transaction through the mobile channel costs the bank $0.08. So more frequent use of the mobile channel will reduce calls to the call center and IVR thereby reducing costs.
On the revenue side, mobile banking appears to cause an increase in profitability. Banking customers who use the mobile channel are more frequent users of the banking channels and are less likely to attrite. They have more Checking accounts and fewer Borrowing accounts. They are higher income levels and carry higher checking balances but lower savings balances.
And the good news is that things are changing FAST. I recently attended an ABA Mobile Banking Webcast and the ROI numbers are striking:
MOBILE BANKING ROI
Bank of America announced in Fall 2009 that it is planning to close 10% of its branches due to increased customer usage of online and mobile banking
- BoA has about 3.5 million mobile banking customers, equating to about 12% of their online banking customer base
- BoA added 150,000 new checking accounts due to mobile offering
Huntington Bank has seen
- Text bankers are 13% more profitable than the average checking client
- Mobile browser bankers are 38% more profitable than the average checking client
- DDA related inquiries to the call center have dropped by 21%
USAA has over 1 million Mobile Banking users, representing about 14% of its total clients
- 23 million logins in 2009
- Over $300 million deposited via iPhone since launch (they have the remote deposit check capture feature through the iPhone)
- Handling more contacts than IVR
What banks need to do while evaluating the mobile channel:
- Don’t Jump Into It: Do not consider the mobile channel because of the hype and it is the “cool thing to do”. Think how the mobile can add value to the customer and to the other channels.
- Think Multichannel: Some banks still consider mobile banking as being isolated from other channels or their overall multichannel strategy. The mobile can serve as an additional authentication/security channel when you login online or you get a code on your iPhone bank app that you need to enter as soon as you swipe your card and enter the PIN at the ATM.
- Don’t Think Online Banking: My needs as a customer may be different when I login through the mobile device vis-a-vis my computer or the ATM channel. The mobile is the most personal channel available yet to marketers. The layout, design and features (example remote deposit check capture) available on the mobile must be different than what is available online.
- Don’t Think Mobile Banking: Don’t think of mobile as mobile banking alone. Think of mobile as the platform for mobile financial services. The mobile will eventually evolve into a channel for funds transfers (P2P and other domestic transfers), NFC solutions like contactless payments; and eWallets that store all the cards/rewards info with integrated marketing/payment.
- It Is Never About Technology: One thing I have learnt working during my career with technology consulting firms is that it is never really about the technology. Initiatives fail not because they did not have the latest and best technology, but because they were too technology focused and failed to get buy-in or sponsorship from a business side executive.
What would men be without women? Scarce, sir, mighty scarce.
There’s no such thing as a soul. It’s just something they made up to scare kids, like the boogeyman or Michael Jackson.LOL
The best way to behave is to misbehave.
The scientific theory I like best is that the rings of Saturn are composed entirely of lost airline luggage.LOL
Your answer was just what I neeedd. It?s made my day!
I’m impressed, I must say. Actually not often do I encounter a weblog that’s both educative and entertaining, and let me inform you, you could have hit the nail on the head. Your idea is excellent; the difficulty is one thing that not sufficient persons are talking intelligently about. I am very completely satisfied that I stumbled across this in my seek for something relating to this.
There’s no such thing as a soul. It’s just something they made up to scare kids, like the boogeyman or Michael Jackson.LOL
Watching your daughter being collected by her date feels like handing over a million dollar Stradivarius to a gorilla.
Simply amazing! Your piece goes to the very heart of the topic, at least for me. I look forward to your future posts.
Hello! I’m at work browsing your blog from my new iphone 3gs! Just wanted to say I love reading through your blog and look forward to all your posts! Carry on the fantastic work!
I am so thrilled that I did did find this remarkable blogpost. Many thanks for the good info. I wish you do not mind me blogging about your post on my new blog. Please post more
Through the years Pepsi has been known for inventing and distributing oddly flavored versions of their renown Pepsi soda. They’ve experimented with clear, white, clear, red, and now they’re going blue with Pepsi blue.
At last, someone comes up with the “right” awsner!
This website online is known as a walk-via for the entire info you wanted about this and didn’t know who to ask. Glimpse here, and you’ll undoubtedly discover it.
Hello! I know this is kinda off topic however I’d figured I’d ask. Would you be interested in exchanging links or maybe guest authoring a blog post or vice-versa? My website addresses a lot of the same topics as yours and I think we could greatly benefit from each other. If you are interested feel free to send me an e-mail. I look forward to hearing from you! Great blog by the way!
My brother recommended I may like this website. He was once totally right. This post truly made my day. You can not consider just how so much time I had spent for this info! Thank you!
During the previous several years Pepsi has been known for developing and selling oddly flavored versions of their well-known Pepsi soda. They’ve made their soda clear, white, clear, red, and now they’re going blue with Pepsi blue.
Very informative and helpful content . You have nice command on the post and have explained in a very nice way. Thanks for helping .Good work,hope your blog be better!I just want to make a blog like this!
Hey! This post couldn’t be written any better! Reading this post reminds me of my previous room mate! He always kept talking about this. I will forward this post to him. Fairly certain he will have a good read. Thanks for sharing!
I went over this website and I think you have a lot of excellent info, saved to fav (:.
Great effort…
I think other web site proprietors should take this site as an model, very clean and great user genial style and design, let alone the content. You’re an expert in this topic!
Greetings from Idaho! I’m bored at work so I decided to check out your blog on my iphone during lunch break. I really like the information you present here and can’t wait to take a look when I get home. I’m surprised at how fast your blog loaded on my cell phone .. I’m not even using WIFI, just 3G .. Anyhow, superb blog!
just read your blog, generally very good with cool content, helpful for us, though i dont agree some ideas. i have subscribe your blog
Great cmomon sense here. Wish I?d thought of that.
A very usefull article – Thank you very much I hope you dont mind me writing about this article on my blog I will also leave a linkback Thanks
I would like to show thanks to the writer for bailing me out of this particular issue. As a result of surfing around throughout the world-wide-web and obtaining thoughts which are not powerful, I thought my life was done. Living devoid of the solutions to the problems you’ve sorted out all through your article content is a serious case, and the kind that could have negatively damaged my career if I had not encountered your web blog. Your own ability and kindness in controlling the whole lot was precious. I don’t know what I would have done if I had not come across such a subject like this. I can also now relish my future. Thanks a lot so much for your high quality and result oriented help. I will not be reluctant to refer your site to anybody who should get direction about this issue.
I do not even understand how I finished up here, however I assumed this publish used to be good. I don’t recognise who you are however definitely you are going to a well-known blogger in the event you are not already
Cheers!
Is that a gun in your pocket, or are you just glad to see me?
What’s the use of happiness? It can’t buy you money.
We truly appreciate your blog post. You’ll find a multitude of means we could put it to good use by using little or no effort on time and financial resources. Thank you really with regard to helping have the post give light to many problems we have got before now.
sort of appreciated this article =) not all of it – there were some things that i found a little off but altogether it was a nice read, thank you for the post!
Regards, Resor
This was fantastic to discover why can’t I enroll in the Rss in order to observe much more posts such as this in the future? Is actually other people seeing this issue?
I am very thrilled that I did stumbled across this remarkable blogpost. Many thanks for the valuable info. I wish you will not mind me blogging about your blogpost on my novel blog. I will be back for more
I really must say thank you for giving me something to escape assignmements. Well, back to work for me. I really have to say thanks!
The design for your blog is a bit off in K-Melon. Yet I like your website. I may have to install a “normal” browser just to enjoy it.
Thought I would escape a bit from homework to tell you how much I enjoy visiting your website. It is one of my few escapes. Thanks so much
Hello admin – That’s surely the wonderful seeking blog I have seen. It had been totally simple to understand and it had been simple to look with the data which i wanted. Great internet design and helpful content material!
AFAICT you’ve cvroeed all the bases with this answer!
You’re the geartest! JMHO
Really good blog. Thank you so much for your time in writing this posts.
Alrihgt alright alright that’s exactly what I needed!
Can’t wait for your next post. Thank yoU!
Can’t wait for your next post. Thank yoU!
There is clearly a lot to realize about this. I consider you made some nice points in features also.
Hey there, I usually don’t comment but figured I would do it now. Plain and simple I like your website.
Great help from this blog! Thanks alot for the information I needed
Thanks for this informative post, i thinks mobile banking is quite increasing in USA and will increase day by day.