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Tarik Husain, business development director for mCommerce at mobile messaging and mobile commerce services company, Sybase 365, on where we are with mobile banking.
Almost all retail banks today offer some form of mobile banking. When we say some form, there seems to be many different ways of doing it, with varying levels of success for those banks offering it. While it is a great idea that I could bank whilst on the train, utilising that ‘lost time’ to pay my electricity bill, the reality is I have actually never done that. In fact, I can rarely remember when my electricity bill is due, let alone utilise the train journey to catch up on my bills. It is comforting to know that technologically I am able to do that, even if I don’t.
Hence, does this mean the dream of the mobile channel for offering banking services has failed to materialise? Not at all. What we have really seen is a lot of ‘me too’ deployments around the world; banks offering the mobile channel because everybody else does. Nobody wants to be left behind.
Here in fact lays the problem; most banks have not clearly thought out their mobile strategy. In fact, most banks have not even considered this channel in any strategic way at all. Many see it merely as something that they should be offering, which misses the crucial point on how to actually leverage or maximise this channel to lower costs and increase customer service.
When you look into the details of mobile banking, you can see why there is confusion. Frankly, most banks do not know much about the telecommunications space, and vice versa for most telecommunications providers about the banking space.
As a bank, when I launch mobile banking, I get the choice of SMS, Rich Client, WAP, USSD, and even a separate Apple iPhone application. What should I do? Launch all channels; pick one or two? What does it all mean? Which phones support what technologies and whom am I targeting (assuming I even thought that far ahead)?
Do it yourself
The other thing that continues to amuse me is that banks often think they need the telecommunications providers to help with this. The truth is they don’t. They did not need them for Internet Banking, and so they do not need them for Mobile Banking. They should simply be the delivery mechanism. Of course, I am not against a mobile operator launching mobile banking and offering to the banks as a service. In some cases where the bank has zero experience with the mobile channel, that could be a good thing.
The reason mobile banking has not been the promised land everyone hoped it would be is a simple one; mobile banking is not easy to use. If you do not make mobile banking easy for the customer, then you cannot expect mobile banking to be a success. Obviously, there are exceptions to that rule, but in general, most implementations have not been that intuitive for the customer. As such, consumers are not bothered adopting it. Some are easy to use, but lack worthwhile features or do not offer much value to the customer.
I have seen a number of mobile banking offerings that come with a small manual on how to use it. Think about that for a moment, you are telling your customers mobile banking is convenient and easy, yet they need a manual to use it. You might have seen manuals that say ‘for your account balance, SMS the following; ACC BAL SAV’, etc. I do not remember getting a manual when I started using Internet Banking. Yet, getting online and using the Internet is actually a lot more complicated than using my phone.
Simple service
So what is the magic bullet for mobile banking? The answer is simply make mobile banking easier for your customers, who may then actually use it.
For example, purge keywords like ACC as nobody wants to remember keywords. Solutions today offer free text banking, where you can ask your bank ‘what is my saving balance’ or ‘savings balance please’. Rule of the thumb: the simpler the service, the more people will utilise it. More importantly, banks have to think outside the box. While it is good to provide account enquiry services, what makes more sense for the banks is when customers ask questions like ‘promotions for my Credit Card at Times Square’.
There is little doubt that a beautifully printed, glossy brochure makes impressive collateral. However, no matter how impressive, the fancy brochure - offering discounts if used with credit cards at place X - that are sent through to customers’ mailboxes every month, often go in the trash, and customers tend to forget what the offers were. Using the mobile channel, banks can give customers the offers when they need them, with details stored in their phones.
Short code ease
My favourite form of mobile banking right now is a full menu-based system, where you simply send in a ‘short code’ and a menu is returned to the phone, with a simple user interface. For example, press 1. Balance 2. Transfer, etc. So all you need to remember is one ‘short code’ when you wish to mobile bank, and use the menu thereafter. How much simpler could it be? No keywords, even I can remember my banks ‘short code’, or better still, I could actually store it in my contacts list.
Once you have solved the issue on ease of use, what do you do to further make the mobile channel effective? Go by a simple principle: offer services that make sense to me as a consumer and to you as a bank.
Let us revisit the earlier example of me sitting on the train. If I received an SMS notification from the bank telling me that my electricity bill would be due in 24 hours during the journey, then perhaps I would actually pay on the spot using my mobile. Give me information I can use. I certainly do not want to be spammed by my bank, but if I can set my own parameters, then there would be no issues. I would set alerts about when my credit card is due, or when the FX rate drops to a point where I should be remitting some money home. By receiving these types of notifications and acting on them, you as a bank could make money (as I remit money home) and lower your costs (timely Credit Card bill payment).
ATMs and internet
The fact is I probably visit a branch once a year and only if I am forced to. My dominant preference is banking via the internet, and I rely largely on ATMs - not just my banks’ ATMs. I do not enjoy long bank queues and I seek out ATMs where I typically do not have to spend time at signing up for new services, just taking money out. By work of elimination, this means the bank now has two main ways to communicate with me: the internet and the mobile phone. If my business only had these two channels, you can bet I would be working hard to ensure both of these are leveraged to the hilt.
I am still excited about the possibilities of mobile banking. Banks need to take a serious look at how to leverage this channel, so that they can offer real value to their customers, while ironically would help banks make, and save money using this channel. Better still, from a customer perspective, the bank may even make me feel like it understands me and what I want from a mobile offering.
Sybase has created technology that enables the unwired enterprise for its customers and partners by delivering enterprise and mobile infrastructure, development and integration software solutions. The world's most critical data in commerce, finance, government, healthcare and defense runs on Sybase. www.sybase.co.uk