What are the differences between browser-based mobile solutions and an app offering?
Gaynor: The basic difference is technology. The browser makes Internet banking available on a mobile device via popular mobile browsers, such as Safari or Chrome. Conversely, a [solution such as] SmartApp delivers banking services via a native app created to leverage all of the Smart phone's capabilities.
From a customer standpoint, the experience is profoundly different; browser-based mobile technology attempts to shrink the Internet down, so that it fits on a mobile device. In the process, the Internet banking site is changed and simplified to work on the small screen, which severely limits capabilities and diminishes customer experience. DuPerrieu: The primary benefit of apps is that the app is easy-to-use. Buttons and finger swipes allow easy, quick access to common tasks, such as bill pay, funds transfers, balance inquiry, etc. Apps are everywhere, and distribution is easy through both direct downloads and app stores. Customers will often share and compare apps with other smartphone users, so an app gives the bank a presence/advertisement on the phone. From a functionality point-of-view, apps are more equipped to handle more complex services. For example, cameras on the phone enable consumer check capture, and NFC chips open the door for cardless payments.
What is involved in implementing mobile banking apps?
DuPerrieu: The most important piece is a good partner or a strong technical staff to develop a set of mobile banking services. If a set of services is purchased from a provider, the internal needs of the bank are impacted much less.
A mobile banking rollout needs to be lead by a person or team interested in and knowledgeable about the new technology, its ability to promote and market to customers, and aware of bank policies. It helps to have bank employees actually using the service so they can aid in customer understanding and advocate for the new product.
Stevenson: Our core processor (CSI) worked closely with the app developer (Malauzai) and our staff on a very aggressive timetable. We were in beta within 45 days of signing our contract. Once in beta our core processor made a major investment in their infrastructure, which allowed them to deliver a top-notch platform to support our mobile banking apps. CSI is very committed to the success of our bank. They aren't just our core processor, they are a partner. We've been with them for 10 years and have a contract for another 10. When we tell them we need something, they come up with a solution.
We have trained the support staff on the product, so not only can they sell it, but they can offer technical support to customers if needed. The majority of our staff uses smartphones, so the training was more of an overview of the app and its capabilities.
Ultimately, how can banks make money or see a tangible return on investment?
Gaynor: Banks can make money by leveraging the mobile channel to cross-sell and up-sell within [apps such as] the SmartApp to mobile customers. This is a very similar story to the learnings of Internet banking. First, a SmartApp increases the customer experience, which raises satisfaction and value and, ultimately, increases revenue. Second, once the bank earns the right to present offers to customers, they can use a mobile marketing framework to cross-sell and up-sell to customers. As social media and banks collide, there will be opportunities for banks to use their customers' friend networks to increase referral opportunities -- social banking.
Stevenson: We believe that it's going to take at least six months before we see the true return. We need to build up a stronger user base before we will see true ROI. We are completing a soft launch to our St. Louis client base before we launch the product nationally. The biggest changes we expect are less foot traffic in our branch and increased mobile transactions. We view our mobile banking platform as a seventh branch. We view our website the same way, but to stay competitive we had to have good mobile banking offering.
We see the ability to constantly improve the organization by conducting primary research within the apps. We are able to send surveys to our customers and ask what new product they are interested in or how we can improve customer service. Would they like us to hold an educational class about first time homebuyers? Would someone like us to hold a class about small business finance? On Thanksgiving, we can send out a message to our clients thanking them for choosing our bank to take care of their family's finances. The app is limitless. It gives us a way to touch the client more, in a cost-effective manner. Plus the app is just fast. I can create a message, read it, proof it and send it within 30 minutes. I don't have to mail it and wait days for customers to get it.
Michael Stevenson is Senior Vice President and Senior Retail Banking officer at St. Louis-based Royal Banks of Missouri. Robb Gaynor is Chief Product officer at Austin, Texas-based Malauzai Software Inc. Steve DuPerrieu is Director of Product Marketing for Paducah, Ky.-based Computer Services Inc. (CSI).