The establishment of mobile banking gained momentum in 2012 thanks to two major factors: Smartphones have become the norm, and it's easier than ever to develop more powerful and more secure apps.

As customers continue embracing banking from their phones and tablets, retail bankers should keep the following points in their mind to truly maximize the benefits of mobile banking.

Start innovating. Most retail banks have been playing catch-up with mobile banking and responding to consumer expectations for convenience rather than driving true innovation.  Banks have focused on building basic functionality into their mobile apps (e.g., a customer could check her balance, transfer funds between accounts and locate ATMs with a few taps). Customers appreciate mobile check deposit, but this convenience is now "table stakes" and not a transformative innovation.  

We have yet to see profound innovation from retail banks in the mobile banking space. Instead, financial support companies, such as Mint and Personal Capital, are fully driving innovation in this space by taking functionality a step further, focusing on visualizing information in a useful way and transforming how customers engage with their personal finances. USAA is working to launch an app that allows customers to open an account by taking a picture of a blank check from another bank on their phone.

Retail banks should be much more innovative in how they use mobile banking to engage with customers. For example, an app could automatically show customers whether they prequalify for a credit card or a mortgage. Similarly, retirement planning tools could help customers understand their progress towards retirement goals and recommend investment products or contributions to achieve those goals.

As banks begin to change their mindset about what a mobile app should do, they will need to evaluate how it affects key metrics, such as the number of products per household and retention. This focus will allow them to find where to invest resources and maximize the impact.

Improve integration with other channels. Mobile banking will play a larger role in the future. However, most banks have not thought through how to most effectively integrate mobile banking with other channels.  

Picture a future where a customer uses their mobile banking app to see whether they're pre-approved for a mortgage. When a customer wants to discuss her particular details, the app should seamlessly connect the customer and a mortgage broker at the closest branch. The staff in the branch should be able view the customer's relationship across products to provide the best advice possible, which would then be seamlessly available in the mobile app as well, for future reference.

Banks must coordinate across all channels to provide the best customer experience possible and maximize opportunities to improve cross-sell and retention, regardless of which channel the customer decides to use.

Refine the experience to maximize ROI. Most banks are not yet charging for mobile services, but this is starting to slowly change.  Charging fees for mobile services will be another important source of fee revenue for banks. US Bank now charges 50 cents per check for mobile check deposit.  The risk is that these fees could cause significant backlash and customer attrition.  Some customer segments, whether across demographics or adoption of mobile technology, will react very distinctly to a fee structure for mobile services. Banks should test different fee levels to determine which work best and identify which customers should be exempt from these fees to avoid losing certain segments of customers.

Additionally, banks will need to determine how mobile offerings affect engagement and retention. While a specific feature may not drive fees by itself, it may create stronger relationships and curb attrition. For instance, while the ability to track underfunded accounts may actually reduce overdraft fee revenues, it could ultimately drive significant improvements in customer satisfaction and retention.  

Microsoft Research released a video that showed their vision of the bank of the future. As banks understand these emerging realities, they will undoubtedly change their strategies. While no one can predict the future, retail banks must be constantly innovating and testing out new ideas to stay ahead of the curve to win in this environment.

William Weidman is a vice president at Applied Predictive Technologies, a Washington, D.C.-based data analytics firm that offers services to retail banks. He can be reached at

Correction: An earlier version of this post erroneously stated that BB&T charges 50 cents per check for mobile check deposit. BB&T does not charge for the service.