As mobile banking was first being delivered, a best practice touted by many industry experts was to make the experience similar to what members would see during an online banking session, only made to fit the phone screen.
This was an expedient approach for technologists who thought they could leverage the Internet infrastructure built out over the previous years. Members will feel more comfortable using this new-fangled technology if it looks familiar, they said. While it was a valid point, in the end, the experience was not up to par with "mobile-expectations." In parallel, over the last few years technology advances have made the "browser-based" approach archaic. Well, archaic for some, reality for others.
An alarming number of credit unions still view mobile banking as an extension of their Internet banking channel. They feel that once they have altered their websites to look good on a smartphone or tablet, their mobile banking offering is launched. Task complete. Eat our innovative dust, competitors. In fact, of the more than 25% of credit unions of more than $50 million in assets that have already launched an app in the Apple App Store, many of those offerings are directly tied to Internet banking.
What these credit unions fail to see is that mobile should stand as a separate and dynamic channel that can be customized for each individual member. Extending your website to a mobile device does not provide this functionality and it also does not enhance the member experience, which is the driving force behind mobile banking implementation for most institutions.
The answer: standalone mobile banking applications. This mobile banking approach provides several key benefits, including a tighter relationship between the technology and the core processing system, a truly better member experience and increased adoption rates.
Apps Make the World Go Round
The Apple App Store launched in July 2008 with 500 apps available for download-a seemingly huge number at the time. Its potential impact was seen immediately with 10 million application downloads in the first weekend. Today, consumers have come to expect that information is not only at their fingertips, but is accessible through an app.
While consumers adopted smaller tasks such as checking e-mail and locating restaurants before they banked via their mobile devices, the practice is now growing by the day. A survey conducted by the Federal Reserve showed that one-out-of-five consumers used their mobile phone to access their bank account, credit card, or other financial account in 2011. The study predicts that adoption could increase to one out of three mobile phone users in 2013.
Consumers first banked through their mobile browser, but as apps have become more pervasive, users expect their mobile banking experience to match the robustness of the other apps available on their device. Research conducted by Malauzai shows that nearly 1,600 financial institutions out of the 8,011 included in the study have listened to that request and created mobile banking apps. Just under 650 of those are credit unions (of more than $50 million in assets). For credit union members, the mobile banking user experience is improved through an app because it puts their financial data in a form in which they are now accustomed to viewing information.
Even an app can fall short of expectations if all it does is serve as a doorway to your mobile website. As I said earlier, it's time to stop thinking about mobile as a form of Internet banking and take its functionality to the next level. To fully realize the potential of app-based mobile banking, it is important that your technology be integrated directly with your core processing system.
'Well, That's Not Possible'
Many of you just said, "Well that's not possible," but it might be easier than you think. Several of the leading core platform providers have put more emphasis on working with third-party developers through partner VIP programs and other plans to open up their technology. In addition, industry trade groups such as the CUNA Technology Council are making efforts to standardize core interface specifications. CUNA's CUFX initiative aims to make integrations more straightforward for credit unions.
Once these two technologies are connected, you can start reaping the rewards of an enhanced member experience. Your members will see a number of improvements, including:
* Instant Self-Service Enrollment. Mobile banking should be just that-mobile. Registering for the service should not require a manual process or interaction with a person at the credit union. Asking members to fish around an Internet banking site to find the mobile offering is not convenient for those who are accessing it from their mobile device. It should be as simple as visiting the app store and searching your institution's name. By linking mobile banking with the core platform instead of Internet banking, members can download the mobile banking app and register in minutes, using only their mobile device.
* Segmentation and Feature Set. Members don't have to wait for their "application" to be reviewed to be given access to certain features based on their member status. For instance, some credit unions reserve mobile remote deposit capture for certain account types. With automated segmentation, members will automatically have access to it or not based on their standing. This is not possible with a strictly mobile/Internet banking relationship because that type of account data is not available.
* Security. Mobile banking is often viewed as a security risk, but a direct connection with the core platform can make it a security solution. Members can perform functions such as card on/off that allows them to activate and deactivate their credit union issued-ATM or credit cards with the swipe of a finger. If they notice a card is missing, they can quickly shut it down without having to call member service. If they find it, it can easily be turned back on through their app. It puts the power of security in your members' hands.
All of these benefits combine to provide the credit union with what they've been seeking all along -better mobile banking adoption rates. On average, credit unions taking this approach are reaching 10% adoption in the first 90 days after launch. In fact, a bank in Texas reached nearly 20% adoption by introducing auto enrollment.
By viewing mobile as a stand-alone channel and pushing the envelop of innovation, community credit unions can differentiate and have a great mobile experience for members. In the end, members win and become more engaged with their credit unions. This is the future of mobile banking.
Robb Gaynor is the co-founder and chief product officer of Malauzai Software, Inc. For info: www.malauzai.com
