"Are we able to provide a customer with what they perceive as a fair value that they're willing to pay a nominal fee for, for the convenience that matches their lifestyle and their needs?" Jay Clark at First Niagara ponders.

Mobile Banking Late Bloomer First Niagara Sees Quick Adoption

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First Niagara was a latecomer to mobile banking, but the upstate New York bank seems to making up for lost time with quick customer adoption. More than 25 percent of the bank's online banking customers signed up for mobile banking within six months of the service's launch in late January, surpassing the bank's initial year-long adoption estimates.

One technical challenge the $37 billion-asset bank faced early on was the difficulty of integrating mobile banking with the bank's core system. (The bank is using Fiserv's Mobiliti mobile banking software, but does not have a Fiserv core.) However, the implementation time from requirements to first generation app was a relatively modest eight months, says Jay Clark, senior vice president and retail planning director at the bank.

Clark acknowledges that the Buffalo bank was somewhat slow to start with mobile banking; it soft-launched its first app in January.

"First Niagara recognized that a lot of our competitors were introducing mobile and our customers were looking for that same convenience," he says. "We're creating a three-year digital roadmap, and mobile is one of many projects we're looking to do to address where the industry and our customers are. Banks used to be the first ones out of the gate with new products and customers had to adapt. Now customers are the first out of the gate and we're having to adapt to how they're using their phone, tablet, and traditional online banking."

Other components of the roadmap include a rebuilt website, improved account opening (on the schedule), and tablet apps.

"We have about 20 individual projects that are focused around that overall experience," Clark says. "I wouldn't go as far as saying using the word omnichannel, but we want to make it easy for customers no matter where they are."

Clark thinks about making deposits and loans easier to apply for online. "The mortgage is a difficult, long, tedious process, with a lot of rules and regulations," he says. The improved process might include a shorter application or a faster way to connect with a mortgage loan officer. The bank is currently looking at available technology offerings to determine whether it will buy or build.

The choice of Fiserv Mobiliti was natural because First Niagara had other related Fiserv products, including Checkfree bill payment software.

The bank's mobile offering is basic so far. "We're in generation one, it's typical," Clark says. It includes text capability, funds transfer between First Niagara accounts, and bill payments to established providers.

The bank will release remote deposit capture in the first quarter of 2014. It has no plans to charge for the service.

However, Clark is thinking about the "FedEx" model of charging customers for speed of payment delivery that Fiserv pitches. "We're thinking about Fiserv's model a lot," Clark says. "For customers, it's all about the value exchange. Are we able to provide a customer with what they perceive as a fair value that they're willing to pay a nominal fee for, for the convenience that matches their lifestyle and their needs?"

The bank originally expected to get 700 employees to sign up for the internal pilot. By day three, 1,500 had signed up. "We had to stop the pilot," Clark says.

The bank marketed the app on its website, in statement inserts, and through marketing pieces in the branches, such as posters and collateral at the teller counter. Employees or "teammates" were educated about the app so they could walk customers through it.

"There's no better advocate to get customers excited about digital offerings than the people interacting with them every day," Clark says.

The bank's goal for 2013 was to get 80,000 users for the mobile app. As of mid-November it was at 138,000. "We're thrilled but not surprised," he says. "There's a lot of pent up demand from customers to make their banking easier." The bank has about 400,000 online banking users and one million consumer customers all told.

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