Mobile Finance is big and getting bigger, with close to 32.M people or 14% of all US wireless subscribers accessing their bank information via a mobile device in Q4 2011. comScore estimates a 21% increase in mobile banking overall and an eye-popping 45% increase in mobile banking app usage since Q4 of 2010.
Obviously this increase in SMS text, mobile browser and app usage is a boon to the banks and creditcard companies as they look to move expensive customer service channels to automated self service. But so far, mobile banking is focused on basic account servicing capabilities to address core customer needs like balance, payment and transfers.
This is changing, however, as the amount of payments in the mobile and online space grows past $6BN at a accelerating rate. Potential disruptors to old school banking like Paypal, Serve, and Google wallet seek to redefine payments without shaking the boat on the industry’s revered merchant fee profit model. More adventurous disruptors like Dwolla are eliminating the merchant fee altogether. As fees and rates become increasingly commoditized, payments companies can compete on superior customer utility and experience to gain dominance in the emerging global digital currency.
The first of a 4 part series, this review compares ten account management capabilities accross four banks, five payment companies, and one financial account aggregator, mint.com. Following this entry, the next three blogs will investigate the mobile offerings of the same ten companies across over 20 more capabilities in Information & Education, Payment, and Loyalty categories. Taken altogether, this review will give you a solid foundation of core mobile capabilities in the retail finance industry and a clear understanding of which elements will shape the future competitive marketplace.
Account Management
Financial companies have extended most account management functions to the online and mobile space. This makes sense when you think of the compelling and immediate savings of migrating from a cost-per-contact of $5-$8 for the phone and $15-$25 per branch visit to an online/mobile cost per contact of less than $0.25. Simple, high volume transactions like balance inquiry, payment, and transfer functions are all available.
The below chart outlines the availability of ten core account management transactions for nine financial service and payment companies.
A few account servicing processes are still out of scope for mobile apps. These holdouts are generally more complicated or high security account transactions like dispute a charge, fraud processing, and change of address. Interestingly, initial account set up, activation and password reset often require online or human interaction as well which seems an easy target for automization.
What’s most surprising, however, is how slow most banks have been to adopt one of the most promising mobile based account utilities: remote check acceptance. A recent study conducted by Mercatus found that 43% of responders who use mobile banking would switch banks for the ability to deposit a check by taking a picture of it. Chase and Paypal are the early adopters of this super useful functionality and each have benefited handsomely with an inflow of new customers like US troops stationed overseas for whom remote deposit is an essential tool.
In the same Mercatus study, a full 50% of customers cited that mobile banking functionality played a role in the decision for their primary bank. Indeed, remote deposit marks a clear milestone in the evolution of value creation for financial services. Original Bricks and Mortar driven thinking focused on the security, deposit base and geographic footprint of a bank as the core decision criteria for doing business. More recently, financial services found excellent customer service as a means of differentiation for customer acquisition and retention. We are now seeing the new wave of competition in Financial Services: Mobile features that create friction free processing anytime anywhere in an intuitive and enriching customer interface.
So far the competitive landscape for mobile banking is wide open for a dominant move that leverages more of the benefits of mobile to significantly enhance customer utility and drive loyalty as part of the experience.
In the next blog entry we will review the Information and Education category and see how some industry leaders are making early moves to using uniquely mobile features as a source of value enrichment for their customers and a key part of the new competitive landscape.
Obviously this increase in SMS text, mobile browser and app usage is a boon to the banks and creditcard companies as they look to move expensive customer service channels to automated self service. But so far, mobile banking is focused on basic account servicing capabilities to address core customer needs like balance, payment and transfers.
This is changing, however, as the amount of payments in the mobile and online space grows past $6BN at a accelerating rate. Potential disruptors to old school banking like Paypal, Serve, and Google wallet seek to redefine payments without shaking the boat on the industry’s revered merchant fee profit model. More adventurous disruptors like Dwolla are eliminating the merchant fee altogether. As fees and rates become increasingly commoditized, payments companies can compete on superior customer utility and experience to gain dominance in the emerging global digital currency.
The first of a 4 part series, this review compares ten account management capabilities accross four banks, five payment companies, and one financial account aggregator, mint.com. Following this entry, the next three blogs will investigate the mobile offerings of the same ten companies across over 20 more capabilities in Information & Education, Payment, and Loyalty categories. Taken altogether, this review will give you a solid foundation of core mobile capabilities in the retail finance industry and a clear understanding of which elements will shape the future competitive marketplace.
Account Management
Financial companies have extended most account management functions to the online and mobile space. This makes sense when you think of the compelling and immediate savings of migrating from a cost-per-contact of $5-$8 for the phone and $15-$25 per branch visit to an online/mobile cost per contact of less than $0.25. Simple, high volume transactions like balance inquiry, payment, and transfer functions are all available.
The below chart outlines the availability of ten core account management transactions for nine financial service and payment companies.
A few account servicing processes are still out of scope for mobile apps. These holdouts are generally more complicated or high security account transactions like dispute a charge, fraud processing, and change of address. Interestingly, initial account set up, activation and password reset often require online or human interaction as well which seems an easy target for automization.
What’s most surprising, however, is how slow most banks have been to adopt one of the most promising mobile based account utilities: remote check acceptance. A recent study conducted by Mercatus found that 43% of responders who use mobile banking would switch banks for the ability to deposit a check by taking a picture of it. Chase and Paypal are the early adopters of this super useful functionality and each have benefited handsomely with an inflow of new customers like US troops stationed overseas for whom remote deposit is an essential tool.
In the same Mercatus study, a full 50% of customers cited that mobile banking functionality played a role in the decision for their primary bank. Indeed, remote deposit marks a clear milestone in the evolution of value creation for financial services. Original Bricks and Mortar driven thinking focused on the security, deposit base and geographic footprint of a bank as the core decision criteria for doing business. More recently, financial services found excellent customer service as a means of differentiation for customer acquisition and retention. We are now seeing the new wave of competition in Financial Services: Mobile features that create friction free processing anytime anywhere in an intuitive and enriching customer interface.
So far the competitive landscape for mobile banking is wide open for a dominant move that leverages more of the benefits of mobile to significantly enhance customer utility and drive loyalty as part of the experience.
In the next blog entry we will review the Information and Education category and see how some industry leaders are making early moves to using uniquely mobile features as a source of value enrichment for their customers and a key part of the new competitive landscape.
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