American Banker was recently invited to have a fireside chat with Hari Gopalkrishnan, a managing director at Bank of America who oversees mobile banking for its consumer and wealth management business, at the Mobile Banking and Payments USA conference in New York hosted by Open Mobile Media.
In the interview, Gopalkrishnan talks about the balance of privacy and personalization and how improving the customer experience is the next frontier of mobile banking. The following is a transcript of that conversation that has been edited for brevity and clarity.
Millennials check their phones, on average, 45 times a day, according to a promotional video for Bank of America.
Yeah, but the more interesting stat is that two-thirds of Americans reach out to their smart phone before their loved one in the morning. We do this annual mobility survey where we go out and ask for behavioral patterns and that's the one that stood out for me this year. Last year, it was that most millennials forget their toothbrush before they forget their smart phone.
What have been the stand-out trends to you in the last 12 months in mobile banking?
Last year, for the first time, mobile volume overtook online volume. More and more people are using mobile banking more and more frequently. This year we've seen a 24% uptick in weekly mobile check deposit compared to 2014.
The second thing we are seeing is the emergence of capabilities that let you do things more securely on a mobile device than what you could do before. Biometrics, fingerprints — things that we've talked about for 10 to 15 years are now real.
Mobile payments have also been talked about for 10 to 15 years and now Apple Pay opened up Pandora's box. It is still very early days, but we are starting to see the trend line shift where customers are starting to adopt and technology providers are starting to provide much more mobile-friendly solutions.
What do you think is going to be the game changer a year from now?
Customer experience is not something we've historically thought about immediately in banking and finance. We thought about transactions. It is typically the Apples and the Googles that think about customer experience. Banks are now starting to see how important it is to driving customer satisfaction. In the next 12 months, I see massive adoption and embracing of things like biometrics, like geolocation, like payments to drive customer experiences that are truly differentiating them into their daily lives. No one wakes up in the morning to bank. No one wakes up and says, 'Gosh, I can't wait to go deposit a check.' At least, I haven't. So for us to have the ability to create great experiences that integrate into our daily lives — that's the differentiator we have to go after.
What are the hurdles?
It is an interesting landscape, because on one hand our customers want frictionless, but on the other, they want super security. They want real personalization — tell me that you know me — but on the other hand, they want privacy. The real challenge is how do we, as a bank, balance between really great, personalized capabilities and making sure that security, privacy and scalability are table stakes. And there is a regulatory regime that obviously oversees all of that. Some of the startups and the fintechs don't have that oversight and they have the luxury of doing cool things.
You mentioned that people don't wake up and want to bank — do you want them to?
We want to integrate into their day-to-day lives. If my son texts me that he is out of money at Syracuse and I need to transfer money from one account to another, historically, there would be an email from him and then I have to log on and find the right place online. Today he can text me, I can respond to the text, then Touch ID authenticate, go to saved transactions and move money while walking from Penn Station to here. To me, that is an example of making a transaction simpler so that it fits into your day-to-day routine, versus saying I'll get to that when I'm in front of a PC.
How do you balance delivering the right kind of experience with security?
Security is not something we are going to compromise on. The minute we lower the bar on that we lose our trust and entitlement to do anything else. There are ways to accomplish both. Everyone knows Touch ID, but that's not it. There are so many other things you can do — you can check for malware, you can check if a phone has been jailbroken, has the same customer logged in from two geographically different locations in the last four hours. You can combine all of that into a set of data points that can enable you to create fraud analytics that help you provide a better security model. It may seem that by making it frictionless, you're lowering the bar. In reality, the opportunity in combining all the capabilities that are out there raises the bar of security while creating a frictionless experience.