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Mobile Strategy Partners 2010 Mobile Banking Summit Workshop Presentation

Mobile Strategy Partners 2010 Mobile Banking Summit Workshop Presentation



Workshop presentation from the American Banker 2010 Mobile Banking and Emerging Applications Conference in Las Vegas.

Workshop presentation from the American Banker 2010 Mobile Banking and Emerging Applications Conference in Las Vegas.



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    Mobile Strategy Partners 2010 Mobile Banking Summit Workshop Presentation Mobile Strategy Partners 2010 Mobile Banking Summit Workshop Presentation Presentation Transcript

    • 2010 Mobile Banking Summit
      Mobile Banking 101
      David Eads, Founder & CEO
      +1 (404) 285-4219
    • Session Abstract
      Not every financial institution has a smart phone app, a text alert service, or a mobile payments platform. And not every bank has the internal resources to build these services from the ground up. 
      This workshop offers an overview of the types of resources you’ll need to get your mobile program off the ground, and gain an understanding the mobile commerce ecosystem. 
    • Why?
      What are your overall business goals?
      Increase market share?
      Increase profitability?
      Attract younger customers? (see above)
      Why do you want to do mobile?
      Bank/CU president just got an iPhone?
      Competitors have mobile offerings?
      You want to achieve your business goals?
      You personally want to do something to make the institution better?
    • It’s about you…
      Mobile requirements seem similar on the surface
      There are different reasons for doing mobile
      Every institution has different needs
      Competitive landscape
      Lines of business
      Market Demographics
      Everyone is “special”
    • Entire Institution
      Mobile affects the entire institution
      Mobile success depends upon the entire institution
      Think about:
      Employee policies (texting, phone use)
      Branch training
      Call center training & procedures
      Marketing, Advertising
      Monthly statements
    • It’s a business
      “If you don’t have enough budget, get a bigger budget” --Jeff Dennes, USAA
      Mobile success requires more than selecting a vendor and turning it on
      Detailed Planning & Execution is critical
      Roadmap & resource decisions
      Integration hiccups will happen
      Plan to avoid them
      Have a team that can handle them
      Measure success
      Real customer satisfaction is the ultimate metric
      Monitor the customer experience
      Don’t accept mediocrity
      Lather. Rinse. Repeat.
    • Measuring Success
      • Are business goals being achieved? Is mobile helping?
      Most common metric
      Often measured in relation to OLB
      Should be measured in relation to ALL customers
      New Accounts.
      Was mobile a factor
      Do they use mobile
      How is mobile affecting debit card use?
      How is mobile affecting balances?
      Satisfaction metrics
      Find ways to measure what customers think
      Email, text users asking their opinions
      Track activity, logins over time.
      Is mobile used consistently over the long term
      Analytics tools
      Web analytics, vendor tools, CEM tools
      Are customers getting done what they’re trying to do
    • Mobile means many things
      Old Fashioned WAP
      Mobile Web Browser
      SMS Account Alerts
      Interactive SMS
      Native/Hybrid Apps
      J2ME/ flip phones
      SMS Mobile Marketing
      NFC / Contactless payments
      Mobile Money Transfer (USSD, etc.)
      P2P Payments
      IVR Phone banking
    • Keep in Mind
      How you implement mobile depends upon why you’re planning to do mobile
      Mobile is a new channel
      How many online banking resources do you have?
      OLB has just one delivery technology – the browser
      How many mobile technologies will you ultimately implement and maintain over time?
      How many mobile team resources do you have
      Mobile is multi-channel
    • So What Do You Need?
      There are a lot of myths about mobile
      Don’t bet your career on incomplete data – things move fast
      Clear vision
      Know what, why, and when you’re doing mobile
      Build a solid business case & base decisions on it
      Get experienced help if you can (shameless plug!)
      Connecting to your infrastructure is the hard part
      Choosing an existing partner’s mobile partner isn’t always the best or only choice
      Too often, it takes longer than everyone thinks it will
    • Facts.
    • Confidential
    • iPhone Sales by Quarter
      Q2 sales are usually much lower than Q1 which includes Christmas
      Source: Apple Inc. data
      FY2010 Q2 Announcement April 20,, 2010 2PT
    • Apple iPad
      300,000 sold first weekend
      2M sold first month (US only)
      Est.5.5Min 2010, 13M 2011 (Macquarie Group Ltd.)
      3,500 new iPad apps
      185,000 apps in App Store
      Will likely affect web expectations, like iPhone did mobile web expectations
    • iPad is global
    • Smartphones to Dominate
      Key Points
      • 45% say their next phone will be a smartphone
      • Hispanics, Asians more likely to own smartphones
      • Personal use accounts for 2/3 of smartphone purchases
      • 50% use Wi-Fi
      • 3% use for voice only
      March 26, 2010
    • iPhone, Android Dominate Usage
      Android is 43% of market with Droid, Dream, CLIQ, Magic, etc.
      Anecdotally, this mirrors what we’re seeing in US
      Source: Admob 3/25/2010
    • Android Overtakes iPhone
      Source: Admob U.S. Smartphone usage 12/2009-3/2010
      January data wasn’t reported in a comparable format
      Data excludes data for phones with less that 1% market share
    • iPhone Dominates Globally
      Lack of carrier exclusivity a possible explanation
    • Installs don’t match usage
      Blackberry and Microsoft users aren’t using mobile web/apps at the same level as iPhone, Android users
      Source: comScore 4/5/2010
    • It’s not just young men
    • Confidential
    • Q3 2009 Mobile User Age
    • Confidential
    • Confidential
    • Q2 2009 Mobile Income
      Blackberry and iPhone users have similar income demographics
      Both are ideal customers
      Blue = iPhone
      Yellow = Blackberry
      Gray = All responses (32k+ households)
      Source: Nielson, 10/15/09
    • Clear Vision
      Making mobile decisions using business realities
    • Building the Business Case
      Cost Reduction
      Reduce calls to the call center
      Balance inquiries are often 70% of calls
      Stickier Customers/Lower Attrition
      Mobile customers attrite less
      Mobile customers are sticky like multi-billpay clients
      Increased revenue
      Increased transactions (more interchange)
      Attract deposits (become the client’s primary FI)
      Mobile marketing and mobile cross selling can increase revenue across traditional lines of business
    • ROI Examples
      30% reduction in live agent, DDA related call center calls: Huntington Bank 12/09
      2% decrease in attrition over online banking :Huntington 12/09
      3 more debit card transactions per month:SunTrust 12/09
      Mobile customers increased account balances: SunTrust 12/09
      More funds on deposit, 50% less likely to churn:NIH FCU 12/09
    • Adoption is Key
      Mobile presents lots of options to grow your business
      You have to make the right choices to get the return
      Clients have to use your mobile offering to see benefits
      Awareness – They have to know it exists
      Access – They have to be able to enroll
      Robust – It has to have useful features
      Referenceable – They should want to tell their friends!
      Supported – Your staff must use it themselves
      Useable – Clients must find it easy to use and compelling
    • Offline Users
      60% of customers are offline customers
      60% of offline customers show interest in using mobile banking (MCOM/Fiserv/Verisign 10/09)
      Offline users provide the biggest ROI opportunity
      Offline customers currently are expensive to support
      Offline presents the biggest technical challenge
    • Mobile Banking Traction
      Source: Luth Research, Mobile Mktg Assn 2/2/10, n=1000 (2010-2011 data ); Mobile Strategy Partners (2008-2009 data)
      Online Banking has about 40% adoption
    • Mobile catches OLB in 2011
      • Conservatively assumes growth slows by 1% each quarter
      • Growth is running at 20% now
      • Adding support for offline users could rapidly increase adoption
    • Mobile Adoption
      Adoption growing 20% per quarter on average
      Adoption often measured as a percentage of OLB
      Goal should be to move offline customers to mobile
      Source: Mobile Financial Congress 12/09, Company Reports; Mobile Strategy Partners analysis
    • Mobile Adoption Curve
      First instances of public adoption number announcements
      BofA 54% growth between Apr 2010 and June 2009 (18% quarterly)
    • Top Mobile Banking Uses
      Source: comScore Mobile Financial Services Survey, 2010, n= 351
      70% of smartphone users use some sort of mobile bankingSource: Data Innovation 1/19/2010 (246 smartphone users)
    • Top Mobile Card Uses
      Source: comScore Mobile Financial Services Survey, 2010, n= 351
    • More than Balances
      Source: Data Innovation 1/19/2010 (246 smartphone users)
    • Mobile Easier for Many
      Source: Fiserv, Calvin Grimes, 10/2009, Multiple responses allowed from users using mobile banking
    • Mobile Remote Deposit
      Key 2o1o feature to consider
      Increase deposits immediately
      Turns the tables on competitors with large branch presence
      Phone is always closer than neighborhood branch or ATM
      Lets secondary FI become the consumer’s primary FI
      Product & Integration details critically important. Look closely!
    • P2P Payments
      Look for 2010 rollouts from a number of institutions
      Checks, Cash the ultimate P2P payment – Mobile RDC
      External Transfers (ACH) viable interim step for some
      FIS, Fiserv, CashEdge, PayPal,Mastercard/Obopay, pushing various offerings
      Pricepoint that sticks remains to be seen… $1.50 in Canada, less in US
    • P2P Momentum
      78m users, many already linked to DDA
      Broad International coverage
      Built-in support to address accounts by email, phone
      Three banks already live (PNC, F Hawaiian, FNB Omaha)
      ~100 others reported “in implementation”
      Fiserv Mobile Money (3Q2010)
      Leverages CheckFree Network - goes live with 30+m accts
      MCOM live with P2P in NZ since 2004
      MasterCard MoneySend (using Obopay)
      EnStreamZoompass initiative in Canada
    • 2010 Reg E Changes
      Mobile useful for institutions to comply with new overdraft regulations
      Mobile can encourage opt-in, document compliance
      Mobile alerts helpful to alert users to low balances
    • Technology
    • How to connect?
      The devil is in the details
      Web Services
      Screen scraping
      ATM, Payment Networks
      Supporting all your users
      60% of your customers aren’t OLB users
      How can they log in? Enroll? KYC?
      Existing partners
      Which incumbent?
      Core, OLB partners may or may not offer best mobile for you
      Has your incumbent partner integrated mobile into an environment like yours?
    • Deceptively Simple
      Alerting can be more complex than it looks
      Monitor all transactions for certain conditions
      Many systems are batch & isolated from alerting engines
      Alerting capabilities vary widely across vendors. Beware!
      Data can kill you (or at least hurt a lot)
      Functionality is often straightforward
      Many challenges lie in variations in the real data
      Mortgages, lines of credit, loans, CDs, etc.
      SMS is not email. iPhone apps aren’t ecommerce
      Plan for carrier certification
      Expect the unexpected from Apple approval process
    • Offline Customers
      Integration to support offline customers tricky
      How do you create credentials for them?
      Where are the credentials stored?
      How do external systems (Branch, ATM, etc.) connect?
      Enrolling every client into OLB a quick fix
      Many OLB providers charge by enrollment – expensive
      Feasible for many Homegrown/Customized OLB banks
      Process from customer perspective requires significant thought and preparation to ensure it’s smooth
      Many vendor systems support offline customers
      Middleware, Single-sign-on is the issue typically
    • Existing Partners
      WAP, Mobile Web often makes a lot of sense to purchase from OLB vendor
      WAP, Mobile Web is essentially just another view
      Infrastructure may be completely the same
      SMS, Native Apps less well understood by OLB folks
      Partnerships, Acquisitions require middleware changes at partners
      Integration into legacy products often slow
      Speed of startup vendors complicates integration
      Nevertheless, existing relationships are very helpful – Just pay attention and be careful
    • Build it Yourself?
      Sometimes it makes sense to build mobile yourself
      You want to create something not on the market
      You have unique, custom built infrastructure
      Buy vendor solutions for standard stuff
      Why recreate balance, transaction inquiries?
      Do POC if you don’t see it running anywhere
      Look for flexibility to innovate your way
    • Conclusion
      Base your decisions on the best facts you can get
      Market is moving fast, stay up to date
      Try to keep emotion, politics out of it (yeah, right)
      Build solid business case for each initiative
      Inspect technology for a good fit
      Look for products already in production
      Look for ways to innovate
    • Fin.