"In banking, there are few sustainable sources of competitive advantage," says Niti Badarinath, senior vice president and head of mobile banking at U.S. Bank, Minneapolis. "Product innovation is probably not a place where banks can truly distinguish themselves, especially in consumer banking. Pricing is also not a source of sustainable competitive advantage: you can change some rates here and there, but it's not something you can keep differentiating yourself on. Then it comes down to, how easy are you going to make it for your customers to access and manage their finances? I believe the most important sustainable competitive advantage comes from having the best customer experience. When Steve Jobs was asked, Why do you think people will buy music from ITunes when they can get it for free from Napster? He said, easy will always beat free, easy is better than free."

In mobile banking, this translates into a user interface that is intuitive, simple and elegant on any device, he says. Younger bank customers, especially, don't like to have to read manuals or FAQs on how things work, he observes. "They expect it to be intuitive, simple, and almost entertaining for them to use something. We spend a lot of time designing experiences that we think are simple, elegant and extremely easy to use."

The bank also invests time, money and effort making sure its mobile banking apps optimized for different devices, he says. Its iPad apps, for instance, are quite different from its iPhone and Android apps, he asserts.

To better tune the bank's mobile offerings, Badarinath's group has built a feedback mechanism for its website called AnswersPortal it plans to roll out to customers shortly. This is intended to be a place where customers can speak their mind about what they like and don't like about U.S. Bank's mobile apps. Customers will log in with their Facebook ID. The thinking behind that is, the bank didn't want to force people to cough up their mobile banking credentials, but they did want to verify who uses the portal. The bank's goal is to allow customers a place to come in and ask questions, without having to call, go to a branch, or look through lots of FAQs. It also hopes to build a community in which customers can learn from each other.

"We're starting to build a conversation with our customers to say, we may not have all the answers and we may not do everything right the first time," Badarinath says. "What's important is that we listen to our customers and act on what they tell us. What you will find is not only are we going to continue to build things that are responsive and adaptive, that know what device you're coming from and optimize the experience, we have a fairly experienced user experience team that constantly is improving the experience. User experience is a key source of differentiation for us, and it pervades everything we do — what features we build, how we build them, how we expose them."

Another new feature in the works is chat capability for the mobile browser (which is used by half the bank's mobile banking customers). "If a customer seems lost based on their browser behavior or if they try to do the same thing three times unsuccessfully, we can pop up a chat window to provide real-time help." The bank also offers a click-to-call button.

U.S. Bank was the first large bank to roll out mobile photo bill payment. In its first week, 400 customers used the feature, which initially only let customers add a biller to pay in the future. In the next phase, to begin shortly, customers will be able to take pictures of invoices to pay billers already enrolled,

The bank was also one of the first and one of the few to create Windows 8 apps. Usage remains low.

Badarinath is considering providing support for the Amazon Kindle Fire HD as Kindle takes more Android share.

The bank is also considering using geolocation to deliver fraud alerts. "If you're trying to use an app in a location that's unrecognized, we can send an alert to your phone that says, 'Is this really you?'" he says.

U.S. Bank's active mobile user base (measured as 30-day actives) has increased by more than 400% in 2011 and 49% in 2012.