In the rush to offer mobile banking, banks may be leaving standard online banking services in the dust.
Mobile banking use is growing like gangbusters, and that's where most banks are deploying their resources today, but that doesn't make online banking a relic of the digital world. There's plenty more to be gleaned from it. At the same time, banks may not know all of the different products and services their online banking providers offer, and they may not be using them to full effect, according to a recent report from IDC Financial Insights.
The report surveyed 11 offerings from top online banking vendors including Fiserv (FISV), Fidelity National Information Services (FIS), Jack Henry & Associates (JKHY), and Harland Financial Solutions.
"The financial services industry has been so enamored with everything mobile, partially at the expense of the online channel," says Marc DeCastro, a research director at IDC Financial Insights and the author of the report.
Instead, banks need to think about combining mobile, tablet, and online banking into a coherent digital strategy, DeCastro says.
"Having one [digital] platform is the ultimate goal," DeCastro says.
About 43% of U.S. adults have used mobile banking in the past month, according to an online survey of 2000 adults conducted in May by IDC, up from 7% for the full year 2009. Use of online banking on average hovers around 50%, but it took consumers decades to get there, experts say.
Gulf Coast Educators Credit Union, of Pasadena, Texas, has $440 million in assets and about 34,000 members, 16,000 of which use online banking. It began offering mobile banking about six months ago, and already 4,000 members are using it.
Among its new online services is online account origination and funding. It would like to provide person-to-person and account-to-account payments, which its vendor Harland Financial Solutions offers. The question is paying for the services and integrating them.
More to the point, though, is figuring out how to get customers to use products the credit union already offers, like text alerts.
"Getting people to realize we have them is a key problem," Jamieson Mackay, vice president of product development for Gulf Coast Educators, says.
That's sometimes made more complicated by vendors, who often don't do a great job communicating what online banking products and services they have to offer, Mackay says.
Harland contends it does a lot to get the word out about its online banking products and services, including networking events, user group meetings, monthly newsletters, product bulletins, case studies and end-consumer marketing support.
"While mobile banking has been considered the next evolution of online banking, online banking usage continues to rise at staggering rates," Andy Lapp, director of product marketing, Harland Financial Solutions wrote in an email.
There are structural problems with online banking, as well. The way online banking is presented to consumers has not changed in close to a decade, experts say.
"Online banking has been saddled with the same interface for years, and it's stale," says Mark Schwanhausser, a senior analyst at Javelin Strategy and Research.
The largest banks and third party vendors quickly learned they had to change the way electronic banking is presented in their mobile and tablet format, simplifying it and paring it down.
Online banking, although it allows users to perform more complicated banking functions, could benefit from a similar, simplifying strategy, Schwanhausser says.
"Most banks are at the mercy of their vendors to come up with the newest version of online banking, and there has been slow movement in terms of redesigning the look and feel," Schwanhausser says.
Cross-pollination between the various digital environments is common, however. Remote deposit capture began as a desktop tool. But it only captured consumers' imaginations in the mobile environment, thanks to the cameras on smartphones.
At the same time, people want a consistent experience across all of their devices. That's particularly important, as online banking traffic begins to shrink and mobile banking traffic takes off, DeCastro says.
That makes sense to the online banking vendors, most of which have either developed in-house or acquired outright a wide range of online banking products and services.
"We don't think of online and mobile or tablet as three separate solutions, we think of them as an integrated digital strategy," says Susan Hawkins, group executive and general manager of FIS eBanking, Mobile and Commercial Treasury Solutions.
Online banking has gone from being a significant channel to the banks' most important channel, with upwards of 60% of transactions taking place there now, Hawkins says.
Meanwhile, the pace of mobile adoption has been so fast and furious, it will be important for banks to optimize each component of the digital channel, because bank customers in the future will come from all of them.
"You have to have a digital strategy that allows you to be optimized for the [device] of choice, but coordinates across all of those [devices]," Hawkins says.
Online banking, with its capacity to perform more complicated banking tasks, also offers banks a strong branding opportunity, say Geoff Knapp, vice president of online banking for Fiserv. There's also the ability to provide deeper product information, and customer service through messaging and chat.
"There is more of a means of entering into a dialogue in the online channel," Knapp says.
Lapp at Harland Financial agrees.
"We see mobile services currently being more often than not transactional, whereas online services increasingly involve interaction like account opening and cross-selling, creating better ways to grow the business," he says.