Mobile Strategy Partners 2010 Mobile Banking Summit Workshop Presentation

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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

  1. 1. 2010 Mobile Banking Summit<br />Mobile Banking 101<br />David Eads, Founder & CEO<br />david@mobilestrategypartners.com<br />+1 (404) 285-4219 <br />
  2. 2. Session Abstract<br /> 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. <br />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. <br />Confidential<br />
  3. 3. Why?<br />What are your overall business goals?<br />Increase market share?<br />Increase profitability?<br />Attract younger customers? (see above)<br />Why do you want to do mobile?<br />Bank/CU president just got an iPhone?<br />Competitors have mobile offerings?<br />You want to achieve your business goals?<br />You personally want to do something to make the institution better?<br />Confidential<br />
  4. 4. It’s about you…<br />Mobile requirements seem similar on the surface<br />There are different reasons for doing mobile<br />Every institution has different needs<br />Competitive landscape<br />Infrastructure<br />Budget/Resources<br />Lines of business<br />Market Demographics<br />Everyone is “special”<br />Confidential<br />
  5. 5. Entire Institution<br />Mobile affects the entire institution<br />Mobile success depends upon the entire institution<br /> Think about: <br />Employee policies (texting, phone use)<br />Branch training<br />Call center training & procedures<br />ATM<br />Marketing, Advertising<br />Monthly statements<br />Confidential<br />
  6. 6. It’s a business<br />“If you don’t have enough budget, get a bigger budget” --Jeff Dennes, USAA<br />Mobile success requires more than selecting a vendor and turning it on<br />Detailed Planning & Execution is critical<br />Roadmap & resource decisions<br />Integration hiccups will happen<br />Plan to avoid them<br />Have a team that can handle them<br />Measure success<br />Real customer satisfaction is the ultimate metric<br />Monitor the customer experience<br />Don’t accept mediocrity<br />Lather. Rinse. Repeat.<br />Confidential<br />
  7. 7. Measuring Success<br /><ul><li>Are business goals being achieved? Is mobile helping?</li></ul>Adoption<br />Most common metric<br />Often measured in relation to OLB<br />Should be measured in relation to ALL customers<br />New Accounts. <br />Was mobile a factor<br />Do they use mobile<br />Transactions<br />How is mobile affecting debit card use?<br />How is mobile affecting balances?<br />Satisfaction metrics<br />Find ways to measure what customers think<br />Email, text users asking their opinions<br /> Track activity, logins over time. <br />Is mobile used consistently over the long term<br />Analytics tools<br />Web analytics, vendor tools, CEM tools<br />Are customers getting done what they’re trying to do <br />Confidential<br />
  8. 8. Mobile means many things<br />Old Fashioned WAP<br />Mobile Web Browser<br />SMS Account Alerts<br />Interactive SMS<br />Native/Hybrid Apps<br />iPhone<br /> Android<br />BlackBerry<br />J2ME/ flip phones<br />SMS Mobile Marketing<br />NFC / Contactless payments<br />Mobile Money Transfer (USSD, etc.)<br />P2P Payments<br />IVR Phone banking<br />Confidential<br />
  9. 9. Keep in Mind<br />How you implement mobile depends upon why you’re planning to do mobile<br />Mobile is a new channel<br />How many online banking resources do you have?<br />OLB has just one delivery technology – the browser<br />How many mobile technologies will you ultimately implement and maintain over time?<br />How many mobile team resources do you have<br />Mobile is multi-channel<br />Confidential<br />
  10. 10. So What Do You Need?<br />Facts.<br />There are a lot of myths about mobile<br />Don’t bet your career on incomplete data – things move fast<br />Clear vision<br />Know what, why, and when you’re doing mobile<br />Build a solid business case & base decisions on it<br />Get experienced help if you can (shameless plug!)<br />Technology<br />Connecting to your infrastructure is the hard part<br />Choosing an existing partner’s mobile partner isn’t always the best or only choice<br />Too often, it takes longer than everyone thinks it will<br />Confidential<br />
  11. 11. Facts.<br />Confidential<br />
  12. 12. Confidential<br />
  13. 13. iPhone Sales by Quarter<br />Confidential<br />Q2 sales are usually much lower than Q1 which includes Christmas<br />Source: Apple Inc. data<br />FY2010 Q2 Announcement April 20,, 2010 2PT<br />
  14. 14. Apple iPad<br />300,000 sold first weekend<br />2M sold first month (US only)<br />Est.5.5Min 2010, 13M 2011 (Macquarie Group Ltd.)<br />3,500 new iPad apps<br />185,000 apps in App Store<br />Will likely affect web expectations, like iPhone did mobile web expectations<br />Confidential<br />
  15. 15. iPad is global<br />Confidential<br />
  16. 16. Smartphones to Dominate<br />Confidential<br />Key Points<br /><ul><li>45% say their next phone will be a smartphone
  17. 17. Hispanics, Asians more likely to own smartphones
  18. 18. Personal use accounts for 2/3 of smartphone purchases
  19. 19. 50% use Wi-Fi
  20. 20. 3% use for voice only</li></ul>March 26, 2010<br />
  21. 21. iPhone, Android Dominate Usage<br />Confidential<br />Android is 43% of market with Droid, Dream, CLIQ, Magic, etc.<br />Anecdotally, this mirrors what we’re seeing in US<br />Source: Admob 3/25/2010<br />
  22. 22. Android Overtakes iPhone<br />Source: Admob U.S. Smartphone usage 12/2009-3/2010<br />January data wasn’t reported in a comparable format<br />Data excludes data for phones with less that 1% market share<br />Confidential<br />
  23. 23. iPhone Dominates Globally<br />Lack of carrier exclusivity a possible explanation<br />Confidential<br />
  24. 24. Installs don’t match usage<br />Confidential<br />Blackberry and Microsoft users aren’t using mobile web/apps at the same level as iPhone, Android users<br />Source: comScore 4/5/2010<br />
  25. 25. It’s not just young men<br />Confidential<br />
  26. 26. Confidential<br />
  27. 27. Q3 2009 Mobile User Age<br />Confidential<br />
  28. 28. Confidential<br />
  29. 29. Confidential<br />
  30. 30. Q2 2009 Mobile Income<br />Blackberry and iPhone users have similar income demographics<br />Both are ideal customers<br />Blue = iPhone<br />Yellow = Blackberry<br />Gray = All responses (32k+ households)<br />Confidential<br />Source: Nielson, 10/15/09<br />
  31. 31. Clear Vision<br />Making mobile decisions using business realities<br />Confidential<br />
  32. 32. Building the Business Case<br />Cost Reduction<br />Reduce calls to the call center<br />Balance inquiries are often 70% of calls<br />Stickier Customers/Lower Attrition<br />Mobile customers attrite less<br />Mobile customers are sticky like multi-billpay clients<br />Increased revenue<br />Increased transactions (more interchange)<br />Attract deposits (become the client’s primary FI)<br />Mobile marketing and mobile cross selling can increase revenue across traditional lines of business<br />Confidential<br />
  33. 33. ROI Examples<br />30% reduction in live agent, DDA related call center calls: Huntington Bank 12/09<br />2% decrease in attrition over online banking :Huntington 12/09<br />3 more debit card transactions per month:SunTrust 12/09<br />Mobile customers increased account balances: SunTrust 12/09<br />More funds on deposit, 50% less likely to churn:NIH FCU 12/09<br />Confidential<br />
  34. 34. Adoption is Key<br />Mobile presents lots of options to grow your business<br />You have to make the right choices to get the return<br />Clients have to use your mobile offering to see benefits<br />Awareness – They have to know it exists<br />Access – They have to be able to enroll<br />Robust – It has to have useful features<br />Referenceable – They should want to tell their friends! <br />Supported – Your staff must use it themselves<br />Useable – Clients must find it easy to use and compelling<br />Confidential<br />
  35. 35. Offline Users<br />60% of customers are offline customers<br />60% of offline customers show interest in using mobile banking (MCOM/Fiserv/Verisign 10/09)<br />Offline users provide the biggest ROI opportunity<br />Offline customers currently are expensive to support<br />Offline presents the biggest technical challenge<br />Confidential<br />
  36. 36. Mobile Banking Traction<br />Source: Luth Research, Mobile Mktg Assn 2/2/10, n=1000 (2010-2011 data ); Mobile Strategy Partners (2008-2009 data)<br />Confidential<br />Online Banking has about 40% adoption<br />
  37. 37. Mobile catches OLB in 2011<br />Confidential<br /><ul><li>Conservatively assumes growth slows by 1% each quarter
  38. 38. Growth is running at 20% now
  39. 39. Adding support for offline users could rapidly increase adoption</li></li></ul><li>Mobile Adoption<br />Adoption growing 20% per quarter on average<br />Adoption often measured as a percentage of OLB<br />Goal should be to move offline customers to mobile<br />Source: Mobile Financial Congress 12/09, Company Reports; Mobile Strategy Partners analysis<br />Confidential<br />
  40. 40. Mobile Adoption Curve<br />First instances of public adoption number announcements<br />BofA 54% growth between Apr 2010 and June 2009 (18% quarterly)<br />Confidential<br />
  41. 41. Top Mobile Banking Uses<br />Confidential<br />Source: comScore Mobile Financial Services Survey, 2010, n= 351<br />70% of smartphone users use some sort of mobile bankingSource: Data Innovation 1/19/2010 (246 smartphone users)<br />
  42. 42. Top Mobile Card Uses<br />Confidential<br />Source: comScore Mobile Financial Services Survey, 2010, n= 351<br />
  43. 43. More than Balances<br />Confidential<br />Source: Data Innovation 1/19/2010 (246 smartphone users)<br />
  44. 44. Mobile Easier for Many<br />Source: Fiserv, Calvin Grimes, 10/2009, Multiple responses allowed from users using mobile banking<br />Confidential<br />
  45. 45. Mobile Remote Deposit<br />Key 2o1o feature to consider<br />Increase deposits immediately<br />Turns the tables on competitors with large branch presence<br />Phone is always closer than neighborhood branch or ATM<br />Lets secondary FI become the consumer’s primary FI<br />Product & Integration details critically important. Look closely!<br />Confidential<br />
  46. 46. P2P Payments<br />Look for 2010 rollouts from a number of institutions<br />Checks, Cash the ultimate P2P payment – Mobile RDC<br />External Transfers (ACH) viable interim step for some<br />FIS, Fiserv, CashEdge, PayPal,Mastercard/Obopay, pushing various offerings<br />Pricepoint that sticks remains to be seen… $1.50 in Canada, less in US<br />Confidential<br />
  47. 47. P2P Momentum<br />PayPal<br />78m users, many already linked to DDA<br />Broad International coverage<br />Built-in support to address accounts by email, phone<br />CashEdgePOPmoney<br />Three banks already live (PNC, F Hawaiian, FNB Omaha)<br />~100 others reported “in implementation”<br />Fiserv Mobile Money (3Q2010)<br />Leverages CheckFree Network - goes live with 30+m accts<br />MCOM live with P2P in NZ since 2004<br />MasterCard MoneySend (using Obopay)<br />EnStreamZoompass initiative in Canada<br />Confidential<br />
  48. 48. 2010 Reg E Changes<br />Mobile useful for institutions to comply with new overdraft regulations<br />Mobile can encourage opt-in, document compliance<br />Mobile alerts helpful to alert users to low balances<br />Confidential<br />
  49. 49. Technology<br />Confidential<br />
  50. 50. How to connect?<br />The devil is in the details<br />OFX<br />Web Services<br />Screen scraping<br />ATM, Payment Networks<br />Supporting all your users<br />60% of your customers aren’t OLB users<br />How can they log in? Enroll? KYC?<br />Existing partners<br />Which incumbent?<br />Core, OLB partners may or may not offer best mobile for you<br />Has your incumbent partner integrated mobile into an environment like yours?<br />Confidential<br />
  51. 51. Deceptively Simple<br />Alerting can be more complex than it looks<br />Monitor all transactions for certain conditions<br />Many systems are batch & isolated from alerting engines<br />Alerting capabilities vary widely across vendors. Beware!<br />Data can kill you (or at least hurt a lot)<br />Functionality is often straightforward<br />Many challenges lie in variations in the real data<br />Mortgages, lines of credit, loans, CDs, etc.<br />SMS is not email. iPhone apps aren’t ecommerce<br />Plan for carrier certification<br />Expect the unexpected from Apple approval process<br />Confidential<br />
  52. 52. Offline Customers<br />Integration to support offline customers tricky<br />How do you create credentials for them?<br />Where are the credentials stored?<br />How do external systems (Branch, ATM, etc.) connect?<br />Enrolling every client into OLB a quick fix<br />Many OLB providers charge by enrollment – expensive<br />Feasible for many Homegrown/Customized OLB banks<br />Process from customer perspective requires significant thought and preparation to ensure it’s smooth<br />Many vendor systems support offline customers<br />Middleware, Single-sign-on is the issue typically<br />Confidential<br />
  53. 53. Existing Partners<br />WAP, Mobile Web often makes a lot of sense to purchase from OLB vendor<br />WAP, Mobile Web is essentially just another view<br />Infrastructure may be completely the same<br />SMS, Native Apps less well understood by OLB folks<br />Partnerships, Acquisitions require middleware changes at partners<br />Integration into legacy products often slow<br />Speed of startup vendors complicates integration <br />Nevertheless, existing relationships are very helpful – Just pay attention and be careful<br />Confidential<br />
  54. 54. Build it Yourself?<br />Sometimes it makes sense to build mobile yourself<br />You want to create something not on the market<br />You have unique, custom built infrastructure<br />Buy vendor solutions for standard stuff<br />Why recreate balance, transaction inquiries?<br />Do POC if you don’t see it running anywhere<br />Look for flexibility to innovate your way<br />Confidential<br />
  55. 55. Conclusion<br />Base your decisions on the best facts you can get<br />Market is moving fast, stay up to date<br />Try to keep emotion, politics out of it (yeah, right)<br />Build solid business case for each initiative<br />Inspect technology for a good fit<br />Look for products already in production<br />Look for ways to innovate<br />Confidential<br />
  56. 56. Fin.<br />Confidential<br />

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