Community Banks Need a Mobile Banking Strategy—Not Just a Mobile Banking App

mobile banking strategyAt a convention late this November, the Arkansas Bankers Association asked attendees, “Does your bank have what it takes to stay competitive in the digital age?” The ABA Technology Conference was “structured to give Arkansas bankers a better understanding of the technology products on the market today, and how to use those products in a way that both benefits customers and safeguards data.”

While attending the convention, I heard some powerful evidence of technology’s increasing impact within the banking industry. One of the most compelling presentations was by featured speaker Trent Fleming, who addressed mobile banking strategy. I thought some of his insights were important to share.

Evolution of communication between banks and customers

Fleming, of Trent Fleming Consulting, advises clients in the financial sector. He believes that mobile banking is emerging as the primary access method to banks—it is becoming the main way that customers communicate with their banks.

After years of conducting all transactions in person at a local branch, bank customers have worked through an evolution of technology options. First was ATMs, then telephone banking and PC banking. Mobile banking has co-existed with internet banking for a few years—but now things are moving to a post-PC environment.

A March study by the Federal Reserve Board “examine[d] trends in adoption and use of mobile banking and payments, and how the emergence of mobile financial services affects how consumers interact with financial institutions.” The survey found that consumers are becoming increasingly reliant on their smartphones and mobile devices—in fact, it seems they rarely put them down.

  • 17% of smartphone owners made a purchase from their mobile phone in the past 12 months
  • 44% used their phone to make price comparisons while at a retail store—and 68% of them changed their purchase decision based on the comparisons
  • 51% of smartphone users (and 33% of ALL mobile phone users) use mobile banking
  • 38% made a check deposit—remote deposit capture—via smartphone in the previous year

Exciting near-future technology for mobile banking

Fleming forecasts a new wave of mobile technology coming into prominence in the near future—and urges banks to develop and cultivate a mobile banking strategy. Tablets and handhelds are already in widespread use. Wearable devices (think smart watches and Google Glass) and e-wallets (such as Apple Pay and CurrentC) are the next big things. Fleming predicts that voice input will become standard, as will customer-to-bank chat functionality on mobile devices.

Imagine the power of enabling customers to access banking features easily and safely, when it’s convenient for them, without having to fiddle with a mobile keyboard or tiny icons on a device screen. A woman driving home from work might remember that she wanted to transfer funds from savings to checking, and submit a couple of bill payments. With voice input and her smart watch, she’s able to initiate and complete the transactions without even lifting her hands off the steering wheel.

Customer security must be part of a mobile banking strategy

Electronic transactions of any type introduce a level of risk. Banks must be diligent to safeguard customer security—but customers are less wary and less skeptical of online and mobile banking than they have been in the past.

Many in the general public have embraced technology’s capabilities to make banking more convenient and have accepted the inherent risks. It is up to financial institutions to set the tone and establish universal acceptance of mobile banking’s merit. Banks must train staff on how to discuss mobile security with customers. Employees should know how to speak confidently about mobile products and services.

Fleming offers a few tips for banks to develop a mobile banking strategy:

  • Beware that mobile banking infrastructure has no margin for error—apps and services must work right the first time to be embraced by customers
  • Fraud is going to happen—we need to arm ourselves with the tools to deal with it
  • Embracing mobile delivery requires persistence and innovation
  • Listen to and observe your clients to determine the best mobile strategy for your bank

 

Image (cc) Intel Free Press via Flickr

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