This is important, I think, because consumer habits and expectations have a tendency to transcend all areas of their lives. So what may start off primarily for personal use, like texting, can expand into business life as usage of it becomes a norm.
Perhaps that’s why SMS (short message service) is the most widely used technology for mobile banking—aside from the fact that it is likely the easiest and least costly service to implement. SMS has been around a long time now, huge numbers of people are using it, and it is easy to use and fairly inexpensive. SMS has reached the “tipping point,” using a phrase coined by Malcolm Gladwell, author of the book by the same name.
the levels at which the momentum for change becomes unstoppable
Tipping Point, Malcom Gladwell
Mobile banking is still in its early stages. It is also not without issues. Awareness is low, even though most major banks offer it in some form. Consumers have security concerns, not unfounded, especially with SMS, because it is simply not secure. Many also feel little sense of urgency to conduct financial transactions on phones that can wait until they get home.
the vast majority of online users are simply not interested in mobile banking…they prefer to wait until they can access the Web, ATM, or phone channel
Excerpt from Forrester Mobile Bank Report
Despite these issues (and what new service doesn’t have them?), it is only a matter of time before they are overcome. Access speeds will get faster. Consumer cost will decrease further and mobile devices will get better. Besides there are plenty of other surveys that show consumers are open to using mobile banking. For instance, a 2008 survey conducted by Fiserv/Checkfree (opens as a PowertPoint) shows that 79 percent of respondents would be interested in conducting financial transactions using a mobile device.
So what is a credit union to do?It almost certain that mobile banking , like home banking, will become a consumer expectation. For now, mobile banking is a strategic play and differentiator because so few financial institutions offer it. Eventually, though, it will be required to compete effectively in the marketplace.
When is the right time to move?
For some, the answer is now, as members demand it. American First, Michigan State University, Patelco and Stanford are just a few credit unions that already offer mobile banking. Aside from being larger credit unions, they each have a membership that is highly receptive to and want new technology-based financial services.
Fortunately, there are some good system players, like CO-OP Financial Services, that are working with mobile solution leaders, such as mFoundry, to guide the way. They are aggregating the buying power of credit unions to help build the necessary economies of scale to bring costs down. They are also making the connection point between the mobile banking interface and core processing systems a little easier. Data processors will be offering mobile banking solutions in the near future as well, and some are already.
For credit unions where jumping completely into mobile banking doesn’t make sense right now, a good place to start is to provide a condensed, mobile-optimized version of your web site. For example, providing hours, locations, ATMs, contact information and rates aligns well with how consumer are currently using the web on mobile devices (e.g. looking up information) and meets immediate need. Building a mobile web site also is generally not a big cost or time investment.
CU Village is working with a number of credit unions that use our content management system to do just that. Once launched, these credit unions will be able manage mobile sites in the same place and way they manage their regular web sites. In some cases, content can be shared across the two sites, like rates using our centralized rates management system. In other cases, the web site content needs to be streamlined to work better on mobile devices. In either scenario, we can work with clients to map out a mobile site and content plan, and guide them through the entire process. Access to the mobile sites will be through a special URL using de facto standards such as m.yoururl.org, www.yoururl.org/mobile or the like. Because both screen and keyboard size tend to be small on mobile phones, keeping the URL as short as possible is important.
The bottom line is that mobile banking, while new and leading edge, will reach a tipping point eventually. Keeping your eyes on the trends of mobile web usage and member sentiment will help you gauge when the right time is for you to make the move. In the meantime, consider making smaller steps with a mobile version of your site and other mobile services like SMS alerts and meeting reminders. It will help get your feet wet and give you a sense of member interest in mobile services without huge risk or investment.
Next post, I'll dig a little deeper into the type, format and form of content to consider including in a mobile optimized web site.
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