In the latest sign of a growing trend toward banks letting customers be mobile-centric, forgoing the usual practice of requiring online banking registration first, Conestoga Bank is integrating mobile banking directly to its core system.
"We see mobile as the future. Our target demographic is mobile savvy. Online banking won't go away, but the younger generation and target market are not tied to their PC. In many cases their phone is their PC," says Lori Adamski, executive vice president and COO of Conestoga Bank, a $621 million-asset bank headquartered in Chester Springs, Pa.
The bank is deploying mFoundry's mobile banking and payments suite to offer a range of mobile financial services that will expand in time, and will eventually include functions for tablets. The new suite will include three offerings — a smartphone app, a mobile web service and an SMS/text banking service covering most mobile devices.
Other features will include a mobile deposit product that enables smartphone users to take a picture of a check and deposit it into their accounts directly.
A unique feature to this deployment is the direct integration of the mobile banking solution to the bank's Open Solutions DNA core system, rather than the bank's online banking platform. Conestoga is the first bank to link to mFoundry this way. Adamski says the bank chose this structure because it wanted to be able to align its delivery channels with its target market and demographics. Mobile and online are distinct products, and at this point the bank doesn't have a single sign on, though Adamski says a single sign on solution was being considered.
As more people use mobile devices as a primary point of contact, the need will grow to enable people to have a digital connection to their bank other than a PC-based web connection. "The ease of downloading an app through the App Store, installing it and using it immediately is a plus for us," Adamski says. "It's another way we're helping our customers stay connected on the go."
One of the benefits will be the ability for customers who aren't online bankers to enroll in mobile banking directly from their smartphones. Some larger banks have offered mobile capabilities to non-web customers for some time. The Conestoga deployment suggests a move of that strategy to community banks and opens up an additional way for mFoundry to install mobility. mFoundry CEO and co-founder Drew Sievers says the seamless integration with the bank's core bypasses the need to overlay mobile banking and online banking solutions, which he says allows the bank to extend beyond its online banking users, putting it in a position to generate more revenue production from the mobile channel.
Adamski says a tablet app is also in the works, and the bank is presently considering how functions such as bill pay are transferrable to the tablets. The bank hopes the direct integration with the core will allow the bank to upgrade the menu of services and devices quickly, since the function will be directly tied to the bank's core platform. "As people are more comfortable doing things on their own, our core system is scalable and we'll be able to add features quickly," Adamski says.
Conestoga's core system is a relational database, which Adamski says makes it easy for the bank to open up different channels. "Being able to go directly though the core gives us more speed to market and more flexibility without sacrificing security."
Mobile banking technology is a lively space in which execs frequently trade barbs, and mFoundry's rival Clairmail was quick to respond to the Conestoga deployment. Carl Tsukahara, CMO and vice president of product at rival Clairmail, says any financial institution seeking to amplify user adoption past the confines of their online user base has to offer connectivity that can extend beyond core banking systems as well as enrollment and credentials independent of online banking.
"Clairmail's distinctive Mobile Connectivity Architecture (MCA) approach is designed to extend its mobile solution beyond a single core system, and instead provides the connectivity system for systems such as card processing, fraud management and other operational systems," says Tsukahara. "This is imperative for realizing the enterprise value of mobile across multiple banking and payments use cases, as well as extend enrollment and adoption potential to users outside of the existing online banking customer base."