What will mobile banking look like five years from now? MovenBank founder Brett King, who expects to launch his branchless, digital bank in June or July, recently spoke about creating frictionless banking. Making the channel easy and simple to use and allowing account opening from the device. The average consumer spends 81 to 97 minutes a day on mobile applications, a 91% increase from last year, he pointed out. "Our expectations of mobile banking are based on the app ecosystem being built on the App Store and Android Marketplace" - banks' new competitors. "The average teenager sends 100 messages a day. The expectation is that the mobile device should just work for us," King said.
Whatever features banks add to mobile banking, such as chat tools, need to be simple enough to use that they don't prompt customers to contact the bank's call center, Marc Warshawsky, senior vice president, mobile channel planning and design executive at Bank of America, pointed out at the same event, SourceMedia's Best Practices in Retail Financial Services Conference in Boca Raton, Fla.
King also spoke of making mobile banking fun and interactive. He showed a video of his toddler daughter being given a magazine, trying to click on it to play with it and getting frustrated when nothing happened. A second video showed her being handed an iPad and then chuckling and happily tapping around on the device. "For my 1-year-old daughter, a magazine is an iPad that doesn't work," he said. "How is she going to bank?"
Tablet banking is a "lean back" experience, said Tom McDermott, senior vice president, cross-channel strategy manager, SunTrust Bank. Any experience thereon, he implied, should therefore be relaxing and enjoyable.
A couple of bankers mentioned, off the record, that they're testing user interfaces on new formats, such as large-screen televisions. One banker said that banks will need to be careful not to let senstitive customer information pop up on a customer's TV while several other people are in the room. Warshawsky commented that you cannot just port a mobile app to a large screen. "It's got to be an experience that really leverages the real estate, you've got to make it unique and relevant to the customer," he said.
Gamification was one theme of the conference, reinforced by the SuperBanker app the conference coordinators encouraged attendees to use (it let them win points toward prizes by answering banking trivia questions and making connections with other attendees and exhibitors). "Games are a great way to demystify financial literacy," said Jason Alderman, senior director, global financial education at Visa Inc.
The build-or-buy debate continues. "Traditional mobile technology providers are not moving fast enough to deliver the services we want to offer," said Nate Wehunt of City National Bank. "We have to either use what's out there or build our own."
Niti Badarinath, senior vice president at U.S. Bank, suggested that the myth that buying software gives you speed to market is not true. "The problem with a product vendor is that you're hostage to their product road maps," he said. "We are under their constraints, we have to wait to receive a new feature until they're ready to roll it out to all their clients."
However, he added, he believes the bank made the right choice to not build its own mobile banking apps. "It costs time and money to build your own user interface." The bank's developers do sometimes modify the mobile banking software as needed. For instance, when U.S. Bank was ready to deploy remote deposit capture before its vendor was, the bank's programmers built their own.
Another theme was putting customers' interests first. "The only metric we measure ourselves by is, is this going to add value to the customer?" Warshawsky said. "We're not going to add value by forcing things in the channel that don't belong there. He also pointed out that the pace of innovation is important, to keep up with customers' expectations, which they form based on the other mobile xperiences they're having.
"There are a lot of new entrants in this space, particularly for financial interactions. The ability to respond and react is important," he said. "But we're not going to change a channel unless it adds convenience to the customer."
Mike Yurochko, senior vice president, innovation at JPMorgan Chase, made this point even more strongly. "You're not going to find answers in a PowerPoint presentation or even in a meeting with 15 guys sitting at a table - your customer is not in the room," he said. "You have to take a customer-centric approach."
King estimated that 70% of Generation Y will use mobile banking as their main channel by 2015. "It's the rise of the de-banked generation," he said. "Banking for them is no longer a place, it's something you do."
Others agreed that this channel deserves much more investment and development and design work. "There's so much untapped capability banks can offer and customers are likely to consume in the mobile channel," said Warshawsky. "You want to enable that channel with the richest set of tools you can. That's what we're doing - adding more flexibility and more capability and more value to the channel."
Speakers and attendees had mixed feelings about mobile payments. "You hear people talk about the value proposition of mobile payments being tapping your phone in the back of a cab, or receiving coupons on your phone to buy two bags of Fritos at Wal-Mart for $5," said Carl Rutstein, senior partner and head of payments practice in The Americas, Boston Consulting Group. "The actual customer value proposition of tapping and of swiping is minor. It doesn't work that well in a restaurant - try handing somebody a phone in a restaurant. When you think about the value of a coupon, it's clear, but why tie it to payments is unclear to us. Why do I want to expose such a small minority of customers to that marketing offer?...There's a lot of noise out there, but not a lot of signal around mobile payments. Those that are being cautious and those that are doing nothing are the ones making the right choices."
Warshawsky at Bank of America, however, saw more value in the idea. "We're bullish on the idea that there's value created through that end-to-end experience, whether it's payments, whether it's a wallet, whether it's knowing the customer's balance, whether it's the potential for additional security and fraud protection," he said. "You'll see a lot of companies making bets on a lot of different technologies."
BOTTOMLINE
If you're not making your smartphone and tablet apps engaging, you may alienate Generation Y.
