Many banks' mobile strategies have hinged on getting smartphone applications to market as fast as possible, but now the early adopters are moving on to the next step — making sure those apps live up to consumers' expectations.
Bank of America Corp., for one, acknowledges room for improvement in its current round of apps for Apple Inc.'s iPhone, Research In Motion Ltd.'s BlackBerry and devices running on Google Inc.'s Android operating system.
Over the next few weeks B of A plans to roll out revised versions of these apps, with more of a focus on under-the-hood improvements than on flashy new features. It also plans new apps for Microsoft Corp.'s Windows Phone 7 operating system and Apple's iPad.
"Overall these new apps will be much faster for our customers," said Marc Warshawsky, the senior vice president of mobile channel planning and design at Bank of America. "They're built a little bit differently than our existing applications, such that the interaction between the customer and the bank should be much quicker. We've also got a new look and feel that we think customers will find more intuitive and easier to use."
In the industry's first go-round, many banks were in such a rush that they developed separate apps for separate functions, such as mobile check deposit, favoring speed to market over providing a unified experience.
B of A managed to avoid that particular temptation, but still recognizes the need to be in the vanguard of Mobile Banking 2.0. Its approach highlights a point that technology analysts and channel experts have been stressing to banks for the past two years: Launching a mobile banking service is just a first step. Banks also need to evaluate the performance of their services — whether they are app-, mobile browser- or text-based — to identify technical deficiencies and opportunities to enhance functionality to meet a growing customer base's taxing demands.
"While channel managers may be forgiven for yielding to an all-too-common refrain from senior management, 'We need an iPhone app,' customers have often been underwhelmed with the results," Emmett Higdon, an analyst for Forrester Research Inc., wrote in a January report. "Poor integration with common native features and navigation as well as customer satisfaction that trails even automated phone systems have left millions of mobile banking users wondering what all the fuss is about."
By 2015, more than 50 million U.S. adults could be using mobile banking services, the report said. It estimated there are a little more than 10 million doing so currently.
James Van Dyke, the president of Javelin Strategy and Research in Pleasanton, Calif., said B of A is among a small number of banks that are good at "channel optimization" using mobile services. With the rollout of mobile services, they have succeeded at getting customers to move away from using higher-cost channels, such as branches and customer call centers.
In a survey of 5,500 U.S. consumers Javelin conducted in November, 29% of respondents said they call their bank and 30% log into online banking when they receive an alert about their financial status from their bank. Only 4% said they log into mobile banking. By comparison, of the survey respondents that were customers of B of A, 25% said they call their bank and 38% log into online banking. Another 7% said they log into mobile banking.
Van Dyke said the results show that B of A has done better than the average bank at migrating customer service issues to lower-cost channels. "If they don't make the service good, then people will just try to go there once and they won't return again," Van Dyke said.
The way a bank rolls out updates can have as much of an impact on customer satisfaction as whether it offers certain mobile services to begin with, said Carl Tsukahara, the chief marketing officer at the mobile banking vendor ClairMail Inc. in San Rafael, Calif.
"It's not just the functionality," Tsukahara said. "It's how you drive adoption of that … so that customers are aware of it."
Warshawsky said each of B of A's apps is being tailored to its particular platform. For example, in developing its first app for Windows smartphones, the bank moved the location of its menu tabs to better fit the look and feel of the operating system, Warshawsky said. "If we tried to port an iPhone experience that we already had built over to a Windows Phone 7 — not to say it wouldn't work — but it just wouldn't be that optimized experience," Warshawsky said.
B of A has also performed a test of a mobile check deposit technology that it plans to add to future versions of its mobile apps, Warshawsky said. "The results of that test were positive and encouraging," Warshawsky said. "Mobile remote deposit is on our strategic road map. We don't have any specific timing that we can share at this point."
B of A is also pilot testing mobile payments technology that allows consumers to wave their phones in front of a contactless merchant terminal to make purchases. Using a digital wallet program on the phone, customers will be able to use Visa Inc. and MasterCard Inc. payment cards with the program. That technology will not be included in the current round of updates for B of A's apps, Warshawsky said.
Van Dyke said that while improving navigation is important, he places less emphasis on overall speed.
"Whether you get to the data you want in three nano-seconds or five seconds, I don't think it's a big deal, honestly," Van Dyke said. "I think that's pretty minor in terms of where banks need to make improvements right now."
Their focus should be on adding more robust details about transactions to alert services and improving alerts, Van Dyke said.
However, Teresa Epperson, who focuses on mobile banking as a partner with the consulting firm Mercatus LLC in Boston, said "speed is important because of consumers' rising expectations around immediate gratification as well as real-time information."
Jeff Dennes, a senior vice president and chief digital officer at Huntington Bancshares Inc. in Columbus, Ohio, said speed has been less of a problem as wireless carriers increase the speed of their own networks. But regular updates by financial institutions and their vendors are necessary to ensure capabilities and performance do not stagnate, he said.
Dennes joined Huntington in August after spending 10 years at USAA Federal Savings Bank, where he helped develop mobile banking features that the San Antonio, Texas, banking company rolled out well ahead of its competitors. At Huntington, he is working on mobile applications for smartphones and other devices, which the bank expects to announce this year.
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