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Lance Drummond, Global Consumer and Small Business Banking eCommerce/ATM Executive, Bank of America
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Mobile Banking: Weighing the Lessons Learned

On the way to growing its mobile banking customer base to more than 1 million users, Bank of America has successfully addressed a number of technological, cultural and marketing-related issues.

Customer Marketing. Our mobile banking marketing activities were sparse in the early stages of the rollout -- primarily to work out the bugs in the technology, reduce the number of potential questions they would raise and minimize any negative impact on customers. We first conducted a series of internal pilots to test the new channel and then, in March 2007, rolled out a pilot to a limited number of bank customers. After making some adjustments, we did our full launch two months later. Only after all the major bugs had been worked out did we aggressively start targeting customers via traditional marketing methods, such as advertising in branches and cross-selling through the Web, online banking and mobile operators.

Cost of Investment. Another key concern while developing a mobile banking solution is keeping costs down. With more than 25 million online customers at Bank of America, integrating a third-party solution was simply not a realistic option for us. Instead, we relied on our internal technical team to build, deploy and maintain our mobile banking platform. While we personally found this method to be a cost-effective alternative, it may not offer the best solution for smaller institutions with a limited amount of internal resources.

Future Opportunities: Over the long term, we see a wide range of opportunities that have yet to be pursued. The first is how best to upgrade mobile banking applications going forward. Due to the nature of the connectivity between customers and the bank, it would be unrealistic to expect customers to visit a branch or connect to the Web to upgrade their mobile banking application. Rather, it would be more practical for the mobile application itself to download any necessary patches in a way that is transparent to the customer. However, there are many technical issues that will have to be explored surrounding this approach, such as determining when to distribute upgrades, synchronizing dependent components and more.

Another expected hurdle is exploring ways to personalize the mobile banking application. As customers begin to trust and use the application more robustly, it is likely that they will expect it to eventually support a number of personalized features, such as a preferred language, date/time formats, different currencies, default transactions, alerts and more. Accordingly, we will need to consider how to customize the application to meet the specific needs of our customers.

A final challenge will be to develop new ways to fully leverage the benefits of the mobile banking technology itself. Ideally, the technology should represent the ability for customers to interact with their bank in real time, including receiving immediate account updates, conducting transactions or making last-minute payments. In short, the technology should allow customers to do things they cannot currently do online and it will need to be advanced in that direction going forward.

Lessons Learned

The introduction of mobile banking at Bank of America has been both exciting and rewarding. It was not an easy road to travel -- we faced a host of challenges as we navigated through virtually uncharted territory. In just two short years, we had to develop an understanding of the mobile banking market, carefully weigh the risks and rewards, build a successful mobile banking platform and support it going forward. Most importantly, we had to do all of this without eroding our core customer base.

We also had to make sure that our substantial investment of time, energy and resources in mobile banking would eventually pay off. While it is too early in the process for us to measure the full value of our platform, we have already witnessed its wide acceptance by our customers, and that should serve as a stepping-stone for us to realize even greater value in the future. However, until mobile banking transforms into customers authorizing mobile payments and interchange via their wireless devices, we might not see significant revenues being generated.

In the meantime, we are slowly and carefully rolling out mobile banking so that both our customers and our institution grow comfortable with its use. Are we on the right path? We like to think so and, judging by the growth in our user base, our customers seem to agree with this assessment.

Lance Drummond is the global consumer and small business banking e-commerce/ATM executive at Charlotte, N.C.-based Bank of America. Drummond manages the consumer online bank, which has more than 22 million subscribers and 11 million bill payers. He is responsible for growing online customer relationships, generating online sales and providing more-efficient processes that leverage the Internet. He also is responsible for delivering capabilities across the bank-owned network of more than 17,000 ATMs. Previously, Drummond was the service and fulfillment operations executive for Bank of America's global technology and operations.

Fastest Metro-Locale Adopters of Bank of America Mobile Banking Service

1. Los Angeles

2. Atlanta

3. Washington, D.C.

4. Dallas

5. New York

6. Houston

7. Phoenix

8. Boston

9. Miami

10. Anaheim

Source: Bank of America, 2008

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