With devices based on Google's Android operating system challenging Apple's iPhone, tablet computing on the rise and SMS text messaging overtaking email in popularity, banks of all sizes have scrambled to anticipate and meet customer demands for mobile banking services. Among the banks that got an early start is SunTrust Banks.
"Initially, we introduced a downloadable app in 2007," notes Kristen Rankin, mobile channel manager for the Atlanta-based institution. "But we soon decided we wanted a solution that functioned across all three primary access methods: downloadable app, mobile web and SMS, while maintaining consistency with our other online solutions."
SunTrust's existing mobile vendor, however, focused solely on downloadable apps, forcing the bank to initiate the usual rigorous vendor selection process in order to add the desired capabilities. Finally, in early 2010, Rankin reports, SunTrust ($170.8 billion in total assets) turned to Fiserv (Brookfield, Wis.) and its partner M-Com, a New Zealand-based start-up that Fiserv subsequently acquired. The bank then raced to roll out the new mobile banking services before year-end.
So what do the experiences of mobile banking trailblazers like SunTrust teach us thus far? Here are the top 10 mobile banking best practices gleaned from discussions with bankers and technology experts alike:
1. Go for the triple play. While smartphone apps have garnered much of the hype, analysts have been suggesting for some time that banks offer all three mobile solutions -- donwloadable apps, mobile browsers and SMS-based services -- and now banks are taking their advice. According to SunTrust's Rankin, mobile web (also called "web apps") users began surpassing active smartphone app users at the bank within three months of deployment. "Today, those using mobile browsers on any device are about double our [downloadable] app users," she says.
It's a similar story at Laredo, Texas-based IBC Bank ($12 billion in total assets), which introduced its first downloadable app in 2008 using the mFoundry (Larkspur, Calif.) platform. "Once our iPhone app was made available, our mobile banking adoption rate increased gradually and steadily through 2010," observes Kevin Mullins, the bank's SVP of electronic services. But, "When we rolled out mobile web last January, adoption went straight up."
2. Invest in versatility. Ensure that your vendor can adapt quickly. "You need a provider with staying power that will grow with you," advises Aaron McPherson, practice director for payments and security with IDC Financial Insights (Framingham, Mass.). "Evaluate vendors, in part, on whether they have a vision that matches current trends: Do they have a good mobile web apps strategy? And do they have the staff to support current growth?"
IBC Bank's Mullins agrees. "Being with a nimble, visionary leader is important," he says. "We like that our vendor, mFoundry, is focused on one thing -- mobile banking. We believe that type of focus is an attribute."
3. Develop with agility. To ensure that your mobile offerings evolve rapidly enough, develop with agility in mind. For traditional organizations such as SunTrust, iterative development can itself be trailblazing.
"SunTrust had always followed the waterfall method," affirms the bank's Rankin. "Our team received approval to pursue iterative development and, because it was new, doing so was fairly complex for us from an organizational perspective. We had four or five work packets moving in tandem and didn't perform end-to-end testing until we were within 45 days of going live. But we successfully met our goal to roll out by December 2010."
4. Test, test and re-test. As mFoundry CEO and cofounder Drew Sievers points out, with mobile banking there's no such thing as testing too much. "Mobile, by definition, is dynamic, always moving and adjusting," he says. "You deploy untested code at your own peril."
As SunTrust discovered, however, following this advice can take the bank into new territory. "We were accustomed to being able to fully test our digital solutions internally," observes SunTrust's Rankin. "But, to ensure our mobile web solution rendered correctly across mobile devices, we needed to augment the number and type of devices and tools available for testing.
"For us," she continues, "the solution was forming a relationship with the remote mobile quality assurance provider DeviceAnywhere [San Mateo, Calif.]. Additionally, connecting our regions to the Fiserv SMS gateway to test the message flow all the way through the carriers and to our devices was a new process and learning curve for us."
5. Secure it right. It is possible to secure a mobile offering -- without reinventing the wheel. "The good news is, the security systems you already have in place can be extended to mobile banking," affirms IDC's McPherson.
For example, encrypt everything that's stored on a mobile device, advises Kelly Rodriguez, director of mobile solutions strategy at Fiserv. "Also, the ability to lock the consumer's device remotely is essential," she says.
Most important, adds Rodriguez, educate your end users -- both to reduce adoption anxiety and improve security. "If they're afraid of it, they won't use it," she emphasizes. "Teach customers to avoid downloading apps that aren't developed by your institution."
And, while security-chipped hardware is on the horizion, hammer home the fact that mobile device security is immature. "They simply aren't as well protected as your desktop computer," Mary T. Monahan, EVP and research director at Javelin Strategy & Research, stresses of mobile devices. "Observe the top three don'ts: Don't install software that just shows up. Don't surf unknown websites. And don't open attachments from people you don't know."
6. Consider mobile remote deposit capture. Paper checks aren't extinct yet. In fact, according to Pleasanton, Calif.-based Javelin's most recent research, one quarter of consumers want mobile RDC. And further, the top financial institutions all expect to introduce the capability within a year.
Indeed, mobile RDC pioneers already are reaping impressive rewards. "For example, at USAA Savings Bank [San Antonio, Texas], check processing costs were 97 percent lower with mobile RDC," Javelin's Monahan asserts.
MFoundry's once-skeptical Sievers concurs. "Personally, I thought mobile RDC would be a niche play," he relates. "But it really is adored by bank customers. We've seen banks getting close to $1 million in deposits the first week of mobile RDC deployment. And it's not from a single $1 million check."
If mobile RDC security is holding you back, you're not alone. "When we asked the banks that don't offer mobile RDC, 'Why not?' security was the No. 1 concern," says Javelin's Monahan. "So the solution is to know your customer -- set deposit limits, establish fixed daily limits or require a certain balance for a certain length of time."
7. Tablets: The latest play. Tablet computers such as Apple's iPad may, or may not, change the game. While everyone agrees tablets provide opportunities, their overall impact remains hotly debated. "Although tablets will be significant for non-banking applications, when you're on the go, it's more about the smartphone in your pocket," comments IBC Bank's Mullins, who speaks from experience as a user of both technologies.
Yet others assert that tablets' larger screen format provides opportunities unavailable on a smartphone. "The interactivity that tablets permit between a bank and its customers is a total game-changer," argues Javelin's Monahan. "Three months after the iPad first came out, 58 percent of banks were already servicing them."
8. Get Ready for HTML5. Some experts have called HTML5, the latest web programming language standard, the true game-changer. As IDC's McPherson points out, HTML5 significantly advances rich web content capabilities. "There are huge cost advantages to using web browsers versus developing downloadable apps," he says, noting that mobile browsers are device agnostic. "HTML5 will really help level the playing field."
9. Leverage device awareness. Device awareness is at the heart of next-gen mobile capabilities. "Banks have a lot of customer data as well as access to location-based information," notes Javelin's Monahan. "Mobile marketing combined with location-based marketing offers huge opportunities -- if it's done right."
In fact, Fiserv's Rodriguez says, some banks already have jumped in. "For instance, we're starting to see financial institutions deliver offers on behalf of merchants via mobile banking," she says.
Beyond marketing, consider leveraging device awareness for other purposes, such as alleviating security concerns. "In addition to pushing out offers, you could push out fraud alerts based on a specific user and device," Monahan says. "Think about the right information and how to share it with the user."
10. Keep an eye on social networking. Not surprisingly, recent research by Fiserv shows that smartphone users and members of Gen Y are more likely to be both mobile bankers and social media enthusiasts. This means banks should prepare to do more than simply respond to social media postings about their mobile offerings, says Rodriguez, "such as incorporating links into mobile banking that allow a user to connect with the financial institution on social sites and post ratings/reviews."
Still, bankers see a go-slow approach. "IBC continues to closely monitor social media developments," says the bank's Mullins. "Social media will clearly play an important role in our future mobile strategies, but we are approaching this segment very cautiously."