It’s refreshing to get the bank perspective about mobile banking. At Mobile Commerce World in San Francisco today, representatives from SunTrust Bank and Wells Fargo took to the stage and discussed the experiences, expectations and future plans of banks working in mobile.
Moderator: Alan Ruperto, Analyst, Javelin Strategy
Panellists: Sarah Overcash, Mobile Banking Channel Manager, SunTrust Bank
Arah Erickson, VP Head of Retail Mobile Banking, Wells Fargo
Mod: What will mobile banking look like at your bank in 5 years?
Sarah: 2 years ago we launched a downloadable app. We’ve got a little over 2% adoption for that – we’re looking to expand that out into SMS, 2-way alerts and WAP banking. We’re also looking at one-time passwords – initially for small business and consumer, but we really think that this could eventually be a much bigger service. But for us the most important thing is to build all of our mobile services on an enterprise wide infrastructure. We think it’s important to take the time to make sure that banking it can be used across all channels in 5 years.
Arah: To talk a little about Wells Fargo’s past before we talk about the future - we’ve currently got an iPhone app, a mobile optimised site and SMS alerts. There was a lot of talk a few years ago about which of the “three sisters” would win: SMS, WAP or downloadable app. We decided to test them all! We discovered that SMS and WAP are hugely different, but each have different strengths. We’ve also seen good uptake on the app. So we’re taking a stance of not jumping any direction too early, but keeping an eye on how the market develops.
Five years from now? I don’t know how the market will look! But we’re going to pay attention to what our customers want, and we’re going to pay attention to trends to make sure we’re at the table.
Mod: The most common consumer reasons for not using mobile banking are: 1) I don’t see the value 2) I don’t think it’s safe 3) I don’t like the data cost. What are your banks doing to address the first two?
Arah: I strongly agree with that first point. Our research shows that of our customers who haven’t adopted mobile, you get maybe 20% who think mobile banking might be valuable. But amongst those who have adopted mobile, the figure is over 80% What we’re seeing is that smartphones are educating people to use their devices to do more. As this happens, they expect to be able to bank as well. We don’t believe we need to build this market – we don’t need to educate the customers. They are going in this direction anyway, and Wells Fargo intends to be there when the customers decide they want to use their mobile for banking. That having been said, we’ve seen a 5 times growth in our customer base this year alone.
Sarah: SunTrust isn’t really as far along as Wells Fargo, in terms of having SMS and WAP. We currently just use a downloadable application. But we’re trying to educate our consumers, both with our mobile app and with other communications. So we saw from research that a lot of people on the street don’t know what mobile banking is. So we’re trying to make sure that both our app and our employees are advocates of this technology. We try to educate consumers about the benefits of mobile banking through inserts in their paper bills, through splash pages on our mobile app and through other channels – and this really has led to a lot of adoption. Now, in terms of security, we’re seeing that mobile is really secure – it’s even safer than on-line banking! But we don’t want to say that to consumers, because we don’t want to damage our on-line banking reputation!
Mod: What do you think are the primary drivers for consumer adoption?
Sarah: Educating consumers!
Arah: I agree. Awareness is one of the key challenges around mobile. More importantly, it’s around smartphone adoption. We have around 18-25% smartphone penetration in the US these days. Smartphone users are five times more likely to be web browsing than feature phones users. That alone is driving a lot of mobile banking – this is a service that web browsers expect to be able to use, whether they’re browsing on a mobile or on-line. A few years ago we thought we should design for lowest common denominator, and we aimed at feature phones. But over time we’ve seen that smartphones are such a driving factor that these are what we should be designing for.
Audience Question: What is the top feature request you’ve seen from customers?
Arah: Classic money movement. Bill payment. Cash transfer. That kind of thing. We’ve provided all of those functions!
Mod: What is your immediate goal?
Sarah: We want to push mobile services out to those people who are currently only using on-line banking. Our customers who are using mobile right now have begun using their bank services more and more. They’re increasing debit card usage, increasing bank interactions across all channels. However, other channels have begun to decrease – for example we’re seeing branch and customer care interactions drop. So we’re happy with that, because mobile is a much more cash efficient channel.
Arah: When we first launched 3 years ago, the primary driver for us was to be where our customers expected us to be. The fundamental thing here is that our customers expect to be able to use their mobile for banking. If they want to be able to do something at the store, at the ATM or on the phone, then that’s what we’ll do. Beyond that, there are a lot of areas that we believe are opportunities for the bank in mobile. There are cost-savings as consumers use less expensive channels. There’s the area of security – mobile is actually one of the ways that customers can keep tighter control of their finances, and become aware more immediately if they have any unusual transactions. There also may be longer term “authentication” practices, where your mobile can be used for authentication.
Mod: How do you believe that the economic crisis effected m-banking adoption in the US?
Sarah: We’ve gotten some research in that says that our mobile app users are borrowing less and saving more. They use the app more to monitor transactions and spending. The crisis may not have pushed the number of users up, but it has increased the amount of mobile banking that mobile users do.
Arah: Our recent research says that customers are now much more careful about closely monitoring their finances – and they believe mobile helps them. We’ve seen that mobile bankers find mobile banking more valuable in hard times.
Audience Question: The “three children”: WAP, app and SMS. Do you think they will co-exist or will one get ahead?
Arah: I try to always look smart by never predicting the future! But we are actively moving towards a market where customers don’t care about the modality of the service, they just care about the phone. I don’t think there will be one part that wins – they’ll tie into a bigger service.
Sarah: I absolutely agree. SunTrust is expanding from the initial app into SMS and WAP. We quickly learned that we need to be able to give clients any access method. The consumers don’t care about how they access, and they will use any method. We’ve found it’s necessary to provide all three.