Channels

10:46 AM
Connect Directly
Facebook
Twitter
Google+
RSS
E-Mail
50%
50%

Banks Falling Behind Pace of Innovation in Mobile Apps

A new survey by CSC and Finextra found that many banks struggle to quickly release new mobile apps, citing competition for internal IT resources.

The proliferation of new devices and operating systems makes the pace of change in mobile hard for many organizations to keep up with. But banks seem to be particularly apt to fall behind the pace of innovation in mobile, according to a new study released by CSC and Finextra.

The survey found that 45% of the 74 institutions involved in the study said it takes them more than 6 months to build a new mobile app, and 22% of them said it would take more than 12 months to build a new one.

Banks are now seeing more logins through their mobile channel than online, yet the survey found levels of investment in mobile applications that indicated that banks aren’t investing new mobile applications. Nearly half (45%) of the institutions in the study said that they are investing less than 5% of their IT budget in mobile development, suggesting that those banks are more interested in maintaining their current mobile apps than building new ones, the study concluded.

[For More On Mobile BAnking Apps: How To Get The Most Out Of Mobile Banking Apps]

In-house resources was cited as the biggest factor impacting speed to market with mobile applications by 78% of the respondents. “With many projects within the wider IT organizations competing for funding, business analysts, developers and managers, this is to be expected,” the report noted.

Those banks in the study that offshored part of their mobile application development saw improved speed to market. Only 8% of the institutions that offshored some of their mobile development said it would take more than a year to build a new mobile app, compared to 24% among those banks that built their apps in-house. Only 12% of the respondents said that they have completely offshored their mobile development.

[The mobile employee -- as well as the mobile customer -- are here to stay. Is your bank prepared? Learn how to set up and maintain a mobile infrastructure that can support today's needs and tomorrow's expected mobile demands. Attend the From BYOD to 802.11ac: How to Build A Next-Generation Mobile Infrastructure session at Interop 2014 in Las Vegas, March 31-April 4.
You can also REGISTER FOR INTEROP HERE.]

Jonathan Camhi has been an associate editor with Bank Systems & Technology since 2012. He previously worked as a freelance journalist in New York City covering politics, health and immigration, and has a master's degree from the City University of New York's Graduate School ... View Full Bio

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
Page 1 / 2   >   >>
Byurcan
50%
50%
Byurcan,
User Rank: Author
4/2/2014 | 9:03:20 PM
re: Banks Falling Behind Pace of Innovation in Mobile Apps
Very good point. The time to market for mobile services must be at a very quick pace to keep up with consumer expectations.
Jonathan_Camhi
50%
50%
Jonathan_Camhi,
User Rank: Author
4/2/2014 | 5:53:53 PM
re: Banks Falling Behind Pace of Innovation in Mobile Apps
Yes but maybe that data issue is something that can be solved over time as the relationship with the offshore team develops and the bank has a better understanding over time of its needs, as well as hopefully improving its own data management during that time.
Abdul Jaludi
50%
50%
Abdul Jaludi,
User Rank: Apprentice
4/1/2014 | 2:38:35 AM
re: Banks Falling Behind Pace of Innovation in Mobile Apps
Part of the problem is mobile and conventional banking development are in different divisions, each reporting up a different chain and competing with each other for shared resources. In much the same way the automakers are trying to change their strategy, banks need to do the same with development work.

I know in some divisions, when mobile and conventional is owned and performed by one team, time to market is greatly reduced. Unfortunately, that doesn't happen too often aside from extremely critical cash cow applications where politics takes a back seat to business requirements and timely delivery.
Ivy Schmerken
50%
50%
Ivy Schmerken,
User Rank: Author
4/1/2014 | 1:24:27 AM
re: Banks Falling Behind Pace of Innovation in Mobile Apps
This kind of delay defeats the purpose of going offshore if banks are not going to offer the data and other resources needed to make the outsourced project a success. Some projects stall even if they start out with good intentions. But the mobile space moves so fast that banks could really fall behind if they go at the pace of the auto industry.
Ivy Schmerken
50%
50%
Ivy Schmerken,
User Rank: Author
3/31/2014 | 9:34:32 PM
re: Banks Falling Behind Pace of Innovation in Mobile Apps
Upgrading mobile apps may be taking a backseat to developing a reporting system or compliance system required by regulators. So while in-house IT teams maybe stretched thin, as you say, parceling out the mobile apps to offshore developers is a way to keep pace with upgrades.
Abdul Jaludi
50%
50%
Abdul Jaludi,
User Rank: Apprentice
3/31/2014 | 9:32:17 PM
re: Banks Falling Behind Pace of Innovation in Mobile Apps
Even when mobile development is moved off-shore, they must still wait for in-house resources who control much of where the data they need to interact with is housed and managed.

Development at the larger banks has become much like producing a new model year car in the auto industry. By the time a new application becomes available it has already been made obsolete by new advances delivered by start-ups and smaller banks.
Jonathan_Camhi
50%
50%
Jonathan_Camhi,
User Rank: Author
3/31/2014 | 8:03:20 PM
re: Banks Falling Behind Pace of Innovation in Mobile Apps
That's one of the reasons that the banks that did offshore parts of their mobile development saw faster speed to market. Those teams that they offshore to don't have to worry about some of these other tasks tat you mention and can focus on app development.
Becca L
50%
50%
Becca L,
User Rank: Author
3/31/2014 | 5:45:45 PM
re: Banks Falling Behind Pace of Innovation in Mobile Apps
This survey seems to suggest banks are having trouble firing on all cylinders to keep existing apps running and supported while simultaneously building and rolling out new apps.

Let's also not forget that for regulated industry, the budget for IT development is a drop in the bucket for what goes into applications. There are all sorts of regulatory hoops and paperwork that loops in multiple departments - I'd be interested to see the time and budget given to those teams.
Jonathan_Camhi
50%
50%
Jonathan_Camhi,
User Rank: Author
3/31/2014 | 1:41:09 AM
re: Banks Falling Behind Pace of Innovation in Mobile Apps
It depends on how the bank views mobile app development. It takes a certain amount of experience to be willing to offshore parts of the development, and I don't know if a lot of banks are there yet.
Jonathan_Camhi
50%
50%
Jonathan_Camhi,
User Rank: Author
3/31/2014 | 1:40:14 AM
re: Banks Falling Behind Pace of Innovation in Mobile Apps
There's already some new technologies that are growing in popularity that many industry experts are predicting will be the "next" mobile check deposit. Mobile photo bill pay and mobile P2P payments look like the most likely candidates. And judging by the way that mobile check deposit, if you want a first mover advantage then you should be offering those capabilities in the near future.
Page 1 / 2   >   >>
Register for Bank Systems & Technology Newsletters
White Papers
Current Issue
Slideshows
Video