App Stores For Financial Services: Online Banking Is Getting Personal
SAN FRANCISCO-App stores could transform online banking for consumers, according to new research from Javelin Strategy.
The report, "Envisioning an App Store Inside Online Banking: Could Open Platforms and Third-Party Developers Unleash Profitable Innovation?" explores how creating highly personalized online banking experiences could yield huge benefits for financial institutions, platform vendors, and developers in terms of new revenue models and opportunities for innovation.
The consultancy said an app store within online banking could build on consumers' rapidly growing comfort with mobile apps.
Javelin research shows that the number of consumers who downloaded mobile apps jumped 39% during the six-month period ending Q3 2010.
In November 2010, approximately 19% of consumers said they had downloaded a mobile app, making it a mainstream activity. Javelin forecasts that 31% of mobile phone owners-or 45 million adults-will download an app in 2011.
Javelin pointed to the success of other industries in creating revenue streams from consumer downloads of apps and opportunities for vendors and developers to access new consumer groups and introduce new apps.
For example, Apple celebrated the 10 billionth download in January, just two and a half years after going live with about 800 apps in July 2008. As the result of an active and innovative developer community, consumers today can choose from more than 300,000 apps for the iPhone, iPod Touch and iPad.
In 2010, Apple raked in almost $5 billion in revenues from downloads in its iTunes stores. Apple not only has attracted the attention of millions of customers, but the talents of developers as well.
The financial services industry could reap revenue and innovation benefits from offering a broad array of financial apps such as PFM, bill pay and credit monitoring, Javelin said. Companies such as Yodlee, PayPal, Intuit, Fiserv, Visa, MasterCard and Andera are seeking first-mover advantages by taking steps to attract developers, apps and users.
Yodlee, citing usage data from apps available through its consumer-facing MoneyCenter website, estimates that a financial institution with 10 million users could ring up nearly $50 million of annual revenue within three years.