Title: Be Ready before You Roll: Customer Demand Is There, but Banks Must Craft the Mobile Channel Carefully
Abstract: [ILLUSTRATION OMITTED] The promise of the still fledgling but fast-growing mobile banking with its economy, reach, and customer acceptance potential, is real--but there's no universal solution. Judging by some of their low adoption rates, many community banks haven't taken advantage of it. This is a great product. It levels the playing field. But if you don't have the team, if you don't have the infrastructure, if you don't have a baseline to start from, it will not be as successful as it could be, says Frank Sorrentino, chairman and CEO, North Jersey Bank, Englewood Cliffs, N.J. Any number of recent surveys point out the seemingly inevitable rise of mobile banking, not least of which is one from the Federal Reserve. The Fed found that one out of five Americans used mobile phones to access bank accounts, credit cards, or other financial accounts in the year ending in January. Another one in five indicated they likely will use mobile banking in the future. The Fed predicted one in three mobile phone users will use mobile banking by 2013. In general terms, mobile banking demand is spearheaded by the 100 million-strong Gen Y, a generation larger and more tech-savvy than the baby boomers. They're not comparing Bank to Bank B, says Virginia Garcia, corporate vice-president at Fiserv, referring to Gen Y. They're comparing the services they're getting with those from American Airlines, Groupon, and Starbucks. That's a new phenomenon. Not only new, but daunting. Community banks have struggled to get consumers to consistently use this growing channel, says Robb Gaynor, cofounder and chief product officer at Malauzai Software Inc. Low consumer adoption offering mobile banking more of a cost for banks. Mobile makes us relevant Sorrentino, who heads a $750 million-assets commercial bank, and Charles Funk, president and CEO, MidWestOne Bank, a $1.7 billion-assets retail bank in Iowa City, Iowa, offered insights into the ways they introduced mobile banking, plus some results, during ABA's National Conference for Bankers earlier this year. After about eight months, North Jersey Bank had a 10% adoption rate among its primarily business customers. Sorrentino said the vast majority of business customers that come in the door start with a loan. We're not generating new clients because of any particular [non-loan] product or service, he said, but borrowers need a convenient way to bank. A product like mobile banking us relevant, and that's what's important. To that end, Sorrentino knew he couldn't just roll out the product and hope customers used it. You have to ask yourself, in your own institution, are you ready for this? What does this product mean to your bank? Will your staff embrace it? MidWestOne Bank started with a beta-test group, including Gen-Y individuals from inside and outside the bank. Funk noted: We really tried to have all our retail staff engaged in telling our customers about this and encouraging them to sign up. After five months' experience, he estimates a sign-up rate now of about 7%. His staff has given plenty of feedback. The phone center supervisor, for example, said that after about 45 days of growing pains, complaints about the channel stopped and switched to compliments. personal banker related that one customer, waiting in line to buy something, found she didn't have cash, so she used her phone to transfer funds and paid with a debit card. bank office manager in a rural town said her husband stopped asking her to check their balance; now, he does it on his own. Looking ahead, said Funk, We're already getting a demand to provide new apps [for smartphones]. That's going to be another challenge. That ties in with what Fiserv's Garcia predicts is next: generally termed the mobile wallet, which includes mobile payments. …
Publication Year: 2012
Publication Date: 2012-05-01
Language: en
Type: article
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