The Future of Mobile Banking: Building a Customer Experience That Starts and Ends with the Customer

The Future of Mobile Banking:

Building a Customer Experience That Starts and Ends with the Customer

Michael J. McEvoy

Managing Director

ath Power Consulting

+1.617.243.9500

September 25th 2013

© ath Power Consulting Corporation. All Rights Reserved.

Context

• The 2013 ath Power Mobile Banking Study™

• Survey Participants: 3,201 banking customers, nationwide

– 1,502 non-mobile banking customers

– 1,504 mobile banking customers

– 195 small business owners, using business mobile banking services

• Institutions Included: 380+ banks and credit unions


• Almost 50 percent of customers log in at least twice weekly• High frequency of interaction opens potential for new ways of serving customer• More interaction means improved customer loyalty and retention

Source: The 2013 ath Power Mobile Banking Study™

Migration to Mobile Creates New and More Frequent Opportunities to Engage

4%

14%

30%

21%

23%

8%

Multiple Times a Day

Daily

2-3 Times a Week

Once a Week

1-2 Times a Month

Less than Once a Month

48%


Raising Adoption and Usageby Improving Customer Experience


10%

11%

13%

14%

31%

39%

42%

Wireless data chargeswould be too high

Too difficult to readscreen

My phone is notsupported

I don't trust thetechnology

I don't need it

Security concerns

I don't possess anappropriate device

What are the main reasons why you have decided not to use mobile banking?

What aspects of security are your greatest concern?

59%

64%

64%

82%

Malware or viruses onmy phone

Losing my phone orhaving it stolen

Interception of my callsor data

Hackers accessing myphone

Impediments to Faster Mobile Adoption: Security Concerns Need to be Addressed



10%

11%

13%

14%

31%

39%

42%

Wireless data chargeswould be too high

Too difficult to readscreen

My phone is notsupported

I don't trust thetechnology

I don't need it

Security concerns

I don't possess anappropriate device

22%

36%

73%

I don't know enoughabout mobile banking

I prefer branch banking

Online banking meetsmy needs

Why do you feel you do not need mobile banking?

Impediments to Faster Mobile Adoption: More Compelling Offering Needed for Online Banking Customers


What are the main reasons why you have decided not to use mobile banking?


2%

19%

57%

22%

Definitely will

Probably will

Probably will not

Definitely will notDefinitely will; 1%

Probably will; 36%

Probably will not;

53%

Definitely will not;

11%

Do you plan to use mobile banking in the next 12 months?

[if 'probably will not' or 'definitely will not']

Do you think you will ever use mobile banking?

4 Out of 5 Non-Users of Mobile Banking Have No Plans to Become Mobile Customers in Coming Year• Current mobile banking offerings are not sufficiently compelling

for many non-users

• Value-added additions will draw new customers and improve usage among existing customers



Current Usage and Future Directions


21%

23%

33%

36%

41%

47%

51%

61%

71%

86%

Transfer Funds Outside Bank

RDC

Check Credit Available

ATM / Branch Locator

Receive Account Alerts

Pay Bills

Check Cleared / Payment Received

Transfer Funds Inside Bank

View Recent Transactions

Check Balances

Please indicate the banking transactions you conduct using your mobile device

Mobile Banking Capabilities Are Still Being Rolled Out,Audiences Are Receptive and Eager for More



Which mobile devices do you use to access your mobile banking account?

7%

37%

90%

Regular Cellphone

Tablet

Smartphone

How Consumers Currently Access Mobile Banking: Emergence of the Tablet

• Concept of ‘Tablet Banking’ becoming more important as tablet penetration grows

• Emergence of a new “Channel”?



Use of Technology to Improve Customer Experience Will Gain Importance as Expectations Rise

Some Examples:• Remote Deposit Capture - most desired capability, still being rolled out• Mobile Photo Bill Pay• Voice Recognition / Assistance• Voice Authentication• Mobile Account Opening

Have you used remote deposit capture at your bank?

Why have you not used it?(select all that apply)



Mobile Bill Pay: Switching Banks Becomes Less Burdensome

• Remote Deposit Capture• Mobile Photo Bill Pay• Voice Recognition / Assistance• Voice Authentication• Mobile Account Opening



Yes, 32%

No, 55% I don't know; 14%

Would voice assistance encourage you to use more mobile banking services?

Making it Easier to Use ‘Mobile’: Voice Recognition / Voice Assistance



For Added Security: Voice Authentication

45%

28%

55%

45%

27%

Do concerns over security discourageyou from using certain mobile banking

services?

Would voice authenticationencourage you to use more mobile

banking services?

Concerns Over Security Discourage Use of Mobile Services

Yes No Maybe


- Would Impact Both Adoption and Usage



Direct ‘Recruitment’ of Mobile Customers:Mobile Account Opening

Example: ‘Mobile Photo Account Opening’

• Upload photo of driving license to initiate account opening

• App. is pre-populated with data from drivers license –eliminates / reduces need for data entry

• Initial account funding possible through RDC



Building a Customer Experience that Starts and Ends with the Customer


Using your mobile phone or tablet, have you done any of the following in the past 12 months?

36%

38%

39%

39%

52%

63%

Made Purchases Through a Mobile App.

Made Purchases Through a MobileWebsite

Researched Product on Mobile Deviceand Purchased In-Store

Researched Product on Mobile Deviceand Purchased Online Using Computer

In-Store Price Comparison

Researched Product on Mobile Device

Customers Increasingly See ‘Mobile’ as End-to-End Solution – Banks Need to do Likewise

• Customers are ahead of banks in their use of mobile technology, are ready for more


• Opportunity to learn from non-bank competitors: develop user experience model from customer standpoint – ensure it all ‘starts and ends’ with the customer


Added Bonus: Revenue Opportunity Retail Customers Indicate Greater Willingness to Pay for Mobile Since Last Year

13%6%

81%

19%13%

68%

$1-2 $3+ Not Willing to Pay

2012 2013

What is the most you would be willing to pay per month for the convenience of mobile banking capabilities?

• TAKEAWAY: Reduced customer resistance to mobile fees occurring while banks are improving the mobile offering with RDC, etc.



Building a Customer Experience that Starts and Ends With the Customer

A Few Takeaways:

• Improving adoption will mean addressing security concerns and providing a more compelling offering for online banking customers

• Adding value-added capabilities to ‘mobile’ such as RDC helps improve:– adoption– usage– revenue potential

• Optimize ‘Customer Experience’ by tailoring it to the device type / channel

• Customers are ahead of banks in their use of mobile technology, are ready for more

• Develop user experience model from customer standpoint – ensure it all ‘starts and ends’ with the customer

The Future of Mobile Banking:

Building a Customer Experience That Starts and Ends with the Customer

Michael J. McEvoy

Managing Director

ath Power Consulting

+1.617.243.9500

September 25th 2013

Economy & Finance

The Future of Mobile Banking: Building a Customer Experience That Starts and Ends with the Customer