The banking world is quickly being split into two camps: those that currently offer a mobile banking solution and those that will. The majority of banks, in my experience, are rolling out mobile banking defensively. In doing so, they miss the real opportunity for banks to create a new delivery channel from the ground up that is aligned from day one with their corporate strategies.
Banks need to move away from an “if-we-build-it, they-will-stay” approach to customer retention and understand that they are building a new delivery channel, one that has the opportunity to change the way their clients interact with them more profoundly than online banking did. Approaching mobile banking as a new delivery channel will help banks compete for and win new clients in this space.
There are three areas I suggest all banks focus on to help them move mobile banking from a defensive, reactive service offering to a proactive, deliberate implementation of a new delivery channel: strategy, vendors and internal expertise.
Clarifying the bank’s mobile banking strategy will help prioritize the features and functionality required and the order in which to roll them out. For most institutions, retail customers are the target of the mobile banking channel.
Vendors are improving their mobile banking products and services rapidly. Beyond the standard feature set of balances, transaction history, bill pay and location assistance, what are the more sophisticated features that should be purchased first: support for consumer remote deposit capture, more advanced payments support, or location-based, merchant-funded awards? Banks should spend some time with this question. The answer will depend on the strategy adopted by the bank.
The products and features for small business and commercial customers are improving within mobile banking and banks that place strategic focus on these customers should not ignore the features important to that market such as remote wire authorization and payments enhancements.
Banks need to look for vendors with three key ingredients in their mobile banking solution:
- Functionality similar to what is currently offered by the best-in-class institutions;
- Intuitive and easy-to-navigate usability. Clunky solutions breed disgruntled users;
- Roadmap showing what the vendor is rolling out next. Does the roadmap support the bank’s goals for the channel?
Without these three components, the new channel is destined to be an “also ran” and will not help the bank attain the defensive goal of keeping customers – let alone the true goal of building a new delivery channel. Vendors that are strong in all three will also be able to help the bank refine and execute on its strategy. The vendor space is opening up in mobile banking. The mobile offerings created by online banking vendors and the “mobile-only” vendors have both improved greatly over the last year.
Banks need an internal resource to champion all things mobile. At Cornerstone, we advocate the designation of a Remote Delivery Channel Manager to manage the mobile and online delivery channels. To whom this person reports in the organization, and his or her specific role and responsibilities are topics for another article. Below are a few things we view as requirements for this position:
- Deep knowledge of the different vendor offerings;
- Up-to-date knowledge of what is happening in the remote delivery market and who are the best-in-class players and why;
- Ability to translate emerging best-in-class functionality into best practices that the bank can pursue with its vendor.
Banks most frequently gain this expertise in one of three ways: they grow it, hire it or rent it through the use of consultants. The rent option is an attractive one for banks, as it speeds the growth process of their internal resources through knowledge transfer. With a focus on strategy, vendors and internal expertise, a bank can move from a defensive, “me-too” implementation of mobile banking, to a strategically integrated delivery channel that will help it compete and win in this new channel.
Mr. Daley is a senior consultant at Cornerstone Advisors, Inc., a Scottsdale, Ariz., based consulting firm specializing in bank management, strategy and technology advisory services. He can be reached at firstname.lastname@example.org.
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