Mobile Banking Apps Many, Marketing Success Stories Few

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LAS VEGAS — In their efforts to sign people up for mobile banking, banks can be their own worst enemy.

The number of financial institutions offering downloadable applications, customized websites and check depositing services for mobile devices is expected to skyrocket in the next year. But consumer adoption could fall short of expectations without the right promotion, experts say.

"In a rush to build out the channel, the marketing wasn't necessarily well thought out," Raj Dhinsa, Verizon Communications Inc.'s managing principal of financial services, said in an interview.

Kristina Hahn, the financial services mobile marketing sales lead at Google Inc., said during a panel discussion at the Bank Administration Institute's Retail Delivery conference here Wednesday that "hands down," stronger marketing could help drive consumer enrollment in mobile banking services.

As an example, she cited a bank that offers a mobile browser version of its website. However, search-engine results on a mobile phone return the bank's standard site, which is not customized for cellphone users.

Margaret Hughes, AT&T Inc.'s head of mobility product management and marketing for financial services, said "we need to have the dollars, the horsepower, behind marketing a brand-new channel to our customers."

Several speakers said the ability to offer customers mobile services has become crucial for banks as awareness of the technology grows and as the availability of these services increasingly dictates consumers' bank choices.

Almost 60% of large-bank customers in a recent survey by the bank consulting firm Mercatus LLC in Boston said the availability of mobile services was a reason they had switched financial institutions.

More regional and smaller banks, which have been slower to offer mobile, are looking into adding new services. But several speakers said financial institutions have an act now, think later approach to new ways of interacting with consumers.

"I think it's definitely true that banks have not invested as much as they should in the marketing and promotion … of their mobile capabilities," Teresa Epperson, a partner with Mercatus LLC, said in an interview. "I think the challenge has been … you had the mobile banking team evangelizing and saying, 'Hey guys, this is really important,' but the corporate marketing group has had a different agenda."

Internal conflicts over funding are common. At some banks the online and mobile development teams are separate and compete for budgets.

"There are people who grew up in the online world who think the online world is [the] storefront. You obviously have to keep pushing your agenda," Jeff Dennes, a senior vice president and director of online and mobile services at Huntington Bancshares Inc. in Columbus, Ohio, said in an interview Wednesday.

Dennes was involved in the rollout of new mobile apps while at USAA Federal Savings Bank in San Antonio.

At USAA, he said he initially faced resistance from colleagues about dedicating resources to developing mobile services.

"There's limited funds, so everyone knows they're fighting for the same dollars," Dennes said.

The rapid pace of developments in mobile technology is too much for some banks. But the success that JPMorgan Chase & Co., USAA and others have had with emerging mobile services like remote deposit capture has helped raise consumer awareness of those capabilities and has started to shape their expectations around what they should be able to do on their phones.

"You've got to give them something to do beyond just checking their balances," said Kareem Al-Bassam, the vice president of payment services for the technology vendor S1 Corp.

S1, of Norcross, Ga., said this week that more than 35 financial institution customers on three continents have licensed its mobile banking application.

More recently the company's bank customers have adopted a segmented enrollment approach for their mobile applications as opposed to a one-size-fits-all approach that many have taken.

Banks that are successful at attracting mobile users generally have more lasting customer relationships, Dennes said.

"There's a stickiness with an online customer, a bill-pay customer [and] a mobile customer," he said.

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