The mobile phone is one of, if not the, most important personal device today. The "always with you" aspect of a mobile phone creates a-bank-in-your-back-pocket convenience for mobile-savvy customers looking for easy account management anywhere, any time.
Mobile banking applications are in the spotlight again, with another report indicating higher than expected rates of adoption amongst Canadians. The research cited in the Globe and Mail article suggests that 2.5 million people in Canada have downloaded a mobile banking app in the last 14 months, with 38% continuing to use that app on a regular basis. Awareness of mobile apps is becoming mainstream and will continue to grow as smartphones become more commonplace in Canada. It's good news for financial institutions that are investing strongly in developing new interactive platforms to improve customer experience and direct customers towards lower-cost service channels.
Those tasked with determining the best mix of mobile banking features for their financial institution may be considering whether to pursue mobile banking apps versus other mobile banking features. Such considerations assume these platforms are mutually exclusive in the eyes of the customers, but the reality is far different. A recent Forrester report suggests that consumers interact with brands via their mobile phones using multiple platforms. The report, focusing on the North American markets, says that of "consumers who interact with brands via their mobile phones, 9% have used apps only; 7% have used a browser only; 40% have used SMS alone; while most have used a combination of SMS, apps, and browsers".
The message is clear: customers don't rely on a single channel or feature for all their banking needs, and financial institutions should consider the greater context of mobile use to determine the right channel mix for their customers.
A recent report from Canadian-based Quorus Consulting group, which surveyed over 2,000 cell phone users, found that amongst the 18 – 34 year olds who use cell phones, 48% have a smart phone. Yet overall, between the ages of 14 – 55+, only one–third of cell phone users have a smart phone.
For Central 1, which first launched mobile banking features in 2008, understanding the real market penetration of smartphones lead to a product development strategy based on more ubiquitous platforms.
Mobile banking was first available to financial institutions via MemberDirect® Mobile Services with the introduction of SMS banking, which allows members to receive balances and account activity via text.
Kelly West, Director, Product Management at Central 1 explains Central 1's approach. "Despite the media hype, only a small percentage of the population could actually use mobile apps in 2008. We've always planned to release a mobile banking app, but the cost to test and develop these products wasn't warranted given that the approach wouldn't yield a high adoption rate for our clients in the short-term," says West.
SMS banking is a feature that leverages a ubiquitous platform amongst all mobile phone users. It was a strategic decision by Central 1 and the Direct Banking Strategy Committee to launch text–based features first, while most other Canadian financial institutions didn't have competitive mobile offerings until early in 2010.
"In this area we are well ahead of the banks. Text banking allowed us to introduce a type of mobile banking that benefitted the most credit unions and credit union members, and before the big banks had their own offerings available", says West. "By early 2010 we had introduced our own mobile web version, ensuring credit unions remained competitive as the Big Five began to rollout their own mobile web and mobile apps".
Looking forward to 2012, Central 1 plans to launch a mobile app for credit unions. "Now that the cost of developing is cheaper and the adoption of smart phones has reached a critical mass, we are working towards launching a mobile app in the New Year", says West.
Pivotal to Central 1's mobile strategy has been to provide a simple solution that serviced the largest amount of members first, and then introduce more sophisticated technology solutions to smaller, more narrowly-focused groups. "It's is important to us to support credit unions nationally, and not to follow a strategy that may only benefit small numbers of credit unions or their members", says West.
Above: SMS Banking (left) and Mobile Web Banking.
Two thirds of the Canadian mobile phone users don't have a smartphone. This means they don't have a mobile phone with a desktop–class browser or the ability to access other mobile banking features such as mobile web or downloading apps. This feature allows all customers, smartphone or otherwise, to view account balances and recent transactions over a mobile phone by sending keyword commands through SMS text messaging.
The benefit to customers is that they can better manage their money, and budget their spending by quickly checking their balances before they make a purchase. This is particularly beneficial to the younger demographic who are big users of debit cards and want access to their balance on the go.
Enabling the text alert feature allows customers to request text messages to be sent to their mobile phone or email address to track account activity, balance, loan, security, investment and payment alerts. "Studies show that nine out of 10 people take action when they receive an alert because they are contextual and offer immediate benefits to the user", says Alexander Chan, Mobile Product Manager at Central 1.
Online banking optimized for the mobile phone delivers a superior user experience for customers wanting to manage their banking on their mobile phone beyond checking account balances and transactions. With MemberDirect® Mobile Banking for Web customers can also pay bills, transfer funds, review transactions, locate ATMs and check current rates without having to be within reach of a branch, or a desktop computer. As the demands of work and home require consumers to increase their productivity on the go, MemberDirect® Mobile Banking for Web delivers a fast, highly functional web-based banking experience.
Interac e-Transfer works on any mobile phone with a desktop-class browser.
A fast, secure, and convenient way for any customer with an email address or a mobile phone number and an account at a Canadian financial institution to send and receive money. The sender does not need to know the recipient's financial institution or account information.
Recipients are notified by email and/or text message when a transfer has been sent, and participating financial institutions transfer the funds using established and secure banking procedures. And because it doesn't rely on stored value accounts, recipients receive the money nearly instantly, deposited into their financial institution's account.
Central 1 Technology and Payment Services