GLASTONBURRY, Conn.-With mobile banking adoption and consumer technology that supports it taking off-exemplified by Apple selling 5 million iPhone 5s over one weekend-financial institutions are racing into the mobile space.
But analysts are concerned a number of "myths" about the mobile channel are hurting credit unions when it comes to making real progress.
Credit Union Journal spoke with several industry analysts about common misperceptions that can cause a CU to be less effective or even stumble with mobile banking. They also shared what consumers want now from mobile and what will be needed down the road (see related stories, page 21).
The importance of getting mobile right was emphasized by Quinton Hamel, product line director, ecommerce, for Open Solutions. Citing 31% year-over-year growth in mobile adoption by U.S. consumers last year, Hamel noted, "That's good. But India had 841% growth last year, and at times more people in India are accessing the Internet through their mobile device than a PC. This is where things are headed. This is not just only about the mobile device, it's about a new Internet platform. The tide is rising and that's the way it is."
Below are the top five mobile myths identified by analysts, who also offered advice to CUs playing in the mobile space.
To get into mobile, the CU simply has to port over the Internet banking site.
Don't make the CU's solution "mobile banking lite," a subset of the credit union's online banking functionality, cautioned David Albertazzi, senior analyst at the Aite Group, Boston.
"As people rush into mobile, this is some of what's happening," said Albertazzi. "As opposed to having an application designed for mobile devices, the mobile browser experience is still tailored for the PC, both in experience and functionality. So users have to scroll around and zoom in to find links, and functionality is limited to standard Internet banking instead of expanding to add features mobile can deliver, such as easy-touse remote deposit capture with a camera phone.
"The banks and credit unions doing things right, as we move toward the second and third generation of mobile, are looking at their whole mobile strategy and trying to address what consumers want and the whole user experience, as opposed to racing to get something out," added Albertazzi.
CUs need to look at mobile as a distinct channel, not an extension of online banking, said Steve Shaw, VP of strategic marketing for Fiserv, Brookfield, Wis.
"While it's distinct and unique, mobile will not replace other channels but will complement them. So it can't be a 'check the box,' just throw up the online banking service in a mobile device," said Shaw. "Do that and you miss an opportunity to touch your members so many more times because they will be interacting with you a lot through a good mobile platform. You need to have a platform that not only provides transactional capabilities but one that also finds unique ways to engage them."
Donald Morrison, SVP of banking and capital markets for the New York-based MphasiS, believes the truly effective mobile application is designed around what members want and mobile's unique capabilities. "Customers are looking for the experience of dealing with a financial institution-whether they have become accustomed to in-branch, online, or phone interaction-on the mobile device."
Members can get the same sort of experience on mobile as in-branch through live chat, or what Morrison thinks is very effective, a guided selling application that walks members through a series of questions that change based on responses and eventually lead to a product recommendation that meets members' needs. "If you ask members what they want, they will tell you. If you give them what they want, they will pay you."
The more features, functionality, and apps the better.
With mobile right now, simple is not necessarily bad.
Aite's Albertazzi emphasized the importance of not making mobile too complicated for the user. "Putting too many features and functionality into the solution will sacrifice the user experience and consumers will say it's too complicated and won't use your offering."
Jim Banks, advisory solutions architect for Symitar, San Diego, cautioned CUs to stay away from some of the "aggressive" mobile applications without first gaining an understanding of what the membership wants. "A lot of things are coming onto mobile that are interesting, but there are some things credit unions should not dive into immediately and impose upon their members across the board."
For example, Banks said, merchant discounts. "There are lots of solutions for mobile rewards. But I don't think there is a broad level of trust yet from members for these kinds of solutions, so credit unions need to step into this kind of water carefully."
The CU has to jump into mobile payments now or be left behind
All the "churn and change" in the mobile payments space, like contactless payments and new mobile wallet apps, is placing undue pressure on some FIs, two sources indicated.
"It's really easy to feel the pressure to get into mobile payments, and to do so without a great deal of planning is not a good idea," said Symitar's Banks. "There is, and there will continue to be, a lot of shakeup in mobile payments. So jumping in quickly without a plan is certainly a misstep."
Fiserv's Shaw agreed, saying, "It's a myth that if you are doing mobile you have to do mobile payments. You don't. Mobile is getting people engaged with you in the mobile channel first. The industry is so focused on mobile payments when it should be focused on making mobile banking successful."
Instead of payments, CUs should be paying more attention to making money transfers from a phone simple, the same for bill payment. "Just getting people comfortable with the mobile process is the first step," said Shaw. "Think of the basics first. There will always be some big, massive (mobile) thing out there to catch the hype. First things first-get members comfortable with the mobile channel."
Getting into mobile means having text, browser and app-based mobile offerings.
Too many credit unions think they need a "triple play," when only the larger institutions need to offer text, browser, and appbased mobile capability, explained Brian Day, Dwolla product leader for The Members Group, Des Moines, Iowa.
"I hear that many credit unions getting into mobile believe they need to offer mobile in all three flavors, when this really is only true for the big CUs due to their larger member base," he said.
Day says TMG encourages credit unions to review their member base first. "Do many members have smartphones? Maybe your CU is in areas where smartphones are really not used that much and that investing in a browser or app based mobile banking product is not a good investment. Maybe it's more applicable to go with text, and then as smartphones begin to penetrate the member base more, look at those different options."
My financial information resides on my phone.
This is a myth, held by many consumers, that CUs must bust to increase mobile adoption, insisted Dr. Kathy Herziger-Snider, VP of products at CO-OP Financial Services, Rancho Cucamonga, Calif. "A lot of people believe that the data about their accounts and their transaction history are stored on the phone and this can be a barrier to mobile adoption," said Herziger-Snider. "They are afraid of losing their phone and someone accessing their financial data. In reality, users are just accessing their data that is stored in a core application that does not reside on their phone. A registration occurs and then there is an authentication every time someone uses their mobile phone for home banking."