Bank Of America Mobile Banking


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Bank Of America Mobile Banking

  1. 1. Case Name:Bank Of America Mobile Banking
  2. 2. Overview 1.Company profile 2.Brand Analysis 3.Competitor 4.Problem statement 5.Context 6.Customer 7.Available alternatives 8.SWOT Analysis
  3. 3. Type Public companyBank of America is the largest Traded as NYSE: BAC BMV: BACU.S. bank holding company; LSE: BAC TYO: 8648 Industry Banking, Financial servicesIt was founded in 1904 and Predecessor(s) Bank America NationsBankexpanded with several Headquarters Bank of America Corporate Centeracquisitions. 100 North Tryon Street Charlotte, North Carolina, U.S.By the end of 2009 BoA was the Key people Brian Moynihan (President & CEO)leader in the market, serving Charles Holliday (Chairman) [2]82% of the US population (over Revenue US$ 115.074 billion (2011) [3]53 M customers) and positioned [3] Net income US$ 1.446 billion (2011) [3] Total assets US$ 2.129 trillion (2011)number one in online and Total equity US$ 230.101 billion [3] (2011)mobile banking. Employees 282,000 (2011) [4] Divisions Bank of America Home Loans,Bank of America Merrill Lynch Subsidiaries Merrill Lynch, U.S. Trust Corporation Website
  4. 4. 4-P AnalysisPrice : FreeProduct : Mobile Banking is broken into three segments; Mobile Website, Text Banking, and MobileApps Mobile website : Pay your bills whenever you want with optional online Bill Pay. Check your balances on Checking accounts, savings accounts and credit cards Footnote Transfer funds immediately to any other Bank of America account. Several other facilities are also available such as ATM locator along with maps Text banking : SMS , banking to request information about checking, savings and credit card accounts. Getting the answers you need is simple when its received within seconds on your phone. Mobile apps: Mobile Banking App, designed specifically for iPhone®, iPad®, Windows® Phone, BlackBerry®, HP® webOS™ and Android™ devices. Wherever you are, youll have easy access to your Bank of America accounts with their quick and convenient Mobile Banking App
  5. 5. 4-P AnalysisPlaceConvenient access to your bank accounts anywhere, anytime. Mobile banking allowsconvenience to consumers so that banking can be done anywhere.PromotionThere are several distribution capabilities for Bank of America. Let’s look at the main formsof digital marketing; Mobile, Online, Onsite, and Social Media. Mobile – Launch in 2008, provides the consumer with a more intimate channel for the promotion. Customers would eventually sign up to receive text messages (SMS) of special offers available to them. Online – YouTube, Twitter, Hulu, Xbox game applications were heavy players in Bank of America’s online presence. BoA conducts test-control experiments, surveys and graphical display ads with their top client Google. Onsite – Bank of America has over 5800 bank branches, 18,000+ ATM’s, along with the bank’s website to help promote the right message to the banking customers. Social Media – Although not a strong presence on Facebook, Bank of America’s Twitter and YouTube provide as great help tools to consumers. Interaction becomes instant and problems can be made apparent to the bank and answers can come quickly to the consumer that is on the move.
  6. 6. CompetitorThe main competitors were: Bank of New York Mellon, JP MorganChase & Co., Wells Fargo & Co., Citigroup, and PNC FinancialServices. Competitor also used mobile banking to ensure a good service totheir customer; they used SMS, web browser and apps, dependingon the bank and the customer they served.Citibank and Wells Fargo had different applications for their targetgroups, making this a customized service.
  7. 7. Problem Statement Mobile banking was launched in 2007 and in less than 3 years they have 4 million customers using the service. Bank of America is struggling to position their mobile banking service in the continuously changing industry. The bank already has a mobile application but is evaluating if they should add more features to this app and how this will affect their clients. Why: Functionality of apps to meet different needs and specific businesses. By providing apps to the different target groups such as: Merrill Lynch brokerage, mortgages, credit cards, consumer payments, etc… • Starcom, agency that supports the bank on digital matters.Collaborator • Other agencies and consulting partners.
  8. 8. Context 10 of the largest banks held 46.4% of total deposits, BoA being the largest one. The banking industry was fragmented, with thousands of banks offering retail and wholesale banking services. The crisis of 2009 led to deep recession and a financial crisis that affected the retail banking business. Banks started waving fees and offering additional benefits in order to capture and retain customers. Mobile banking was introduced in the US in 2007 which added costs to each transaction but these were lower than call centers and IVR costs. Mobile banking had three options: mobile messaging (MSM and no software installation), mobile Internet (WAP), and mobile apps (more sophisticated and costly, Smartphone use was estimated to grow to 46% of user in 2014).
  9. 9. Customers Chose their bank based on low account minimums, competitive rates and convenient locations. In 2009 10 million consumers used mobile banking and this was expected to grow to 37 million by 2014. Customers willing to use mobile banking are not the same as online users. Security issues, low value and cost of data access were the primary reasons why customers would not use mobile banking. Debit card holders were the most active users because of the convenience of checking their account balances at any time. They are reluctant to try a new banking service if it represented an extra cost and were also afraid of losing control of their finances. Customers switch their usual bank channels and the retention is higher for online services.
  10. 10. Available alternatives1. By increase the functionality. increasing the functionality could come with risks of losinghigh-profiles in the marketplace because of a slowdown in the app. The complexity of theapp could deter the user away to a more simplistic app from one of the competitors.Advantages No extra costs on building a new application Customers want customization in the products; this will increase retention and satisfaction. Customers that don´t like technology or doubt about security issues wont be affected. Other banks offer better mobile apps and this will increase their competitive advantage.Disadvantages This would be a very unwise decision because the technology they use is already dated and will be irrelevant in the coming years Cost of application creation will increase due to the different areas and type of customers at BoA Customer satisfaction will suffer if the app is not updated and does not fulfill their needs. Transactions will still be done through ATMs, Call centers and IVR, which are 4 to 11 times more costly.
  11. 11. Available alternatives2. BY building new apps.• Building new apps would mean the opportunity cost is much higher if they were to take necessary resources away from other important business segments. At the same time this could add to the customization that customers are looking for from their financial institution.Advantage They could start from scratch and develop a brand new app to pair with their current app that focuses more on the business mans needs. This could be a very good option as there is certainly a market for a more professional business banking app where one could check their balance and their stocks all in one place.Disadvantage building a brand new application needs requires huge investment. Degree of success of new application requires great marketing effort and plan. Also it requires understanding the need of the customer.
  12. 12. SWOT Analysis S W O T TRENGTHS EAKNESSES PPORTUNITIES HREATS• Huge Customer Base • Weak wholesale banking• Diversified range of operations • Expansion in • Subprime banking and non-banking • Not as nimble as smaller, international markets exposure. financial services & regional operators • Further consolidation • Consolidation in products • The company has lost the in the banking industry financial service• Innovations in products ability to compete head- • Merrill Lynch industry. and services give it a to-head in an environment acquisition • Increased major strength in where it lacks a size • Countrywide Home regulatory attracting customers advantage Loans acquisition pressure on• Convenience (online interchange banking, mobile banking, rates. large retail branch • Volatibility in availability) financial markets• Brand recognition• Strong internet banking presence
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