Banks Introduce New iPhone and iPad Applications

As was predicted late last year at the Mobile Financial Services Congress held in Miami, not a week goes by without another bank introducing a smart phone mobile banking application. And with the introduction of the Apple iPad, many banks have expanded their mobile innovation to include the new device.

For instance, TD Bank has recently introduced TD Mobile Ap for both personal and small business customers covering banking, insurance and wealth management products. In addition to providing a mapping tool for branches, ATMs and TD Waterhouse Investor Centers for both the iPhone and iPad, there are must-have applications for viewing balances and activity, paying bills and transferring funds. TD also provides a way to access TD Waterhouse Investment Reps and TD Insurance Agents and provides a seamless link to their Easyline telephone banking services.


What is interesting is that as more and more banks expand their mobile offerings and are including the iPad as a supported device, I have yet to see any functions customized just for the iPad. Most banks are simply taking what they are developing for the iPhone user and formatting the functions for the new tool. While I suspect specialized applications such as loan forms, new account documents and personal financial management reports will eventually be available for the iPad, more innovation is needed to take mobile banking to the next step. Maybe I will just have to wait for Bank of America to make the first move.

SIFMA Asset Management Account Roundtable Recap

I would like to thank the people from the Securities Industry and Financial Markets Association (SIFMA) as well as co-chairs Jennifer Byrd from Morgan Stanley Smith Barney and Steve Newcamp from Federated Investors. As always, the event was well attended and the sharing of ideas and insights from the speakers and participants was great. I would be remiss if I didn't also thank my own company, Harland Clarke for the amazing dinner at the Battery Park Gardens Restaurant where, even with the rain, the view of the Statue of Liberty was super.

Some interesting takeaways from the meeting:

• Lucy Suarez (Fiserv): The impact of mobile can not be overlooked and the demographics of mobile banking users is trending older over time. As referenced in some of my previous blogs, a majority of iPhone owners and a large percentage of smart phone owners use mobile banking monthly. She also referenced that deployment by financial institutions of all sizes is growing rapidly. The future of mobile will definitely go beyond balance inquiries and transfer of funds to include mobile deposits, person-to-person payments and the ability to sign-up for the service without online banking required.
• During the product development breakout session, it became apparent that, while a case can be made for the development of mobile banking applications for the AMA product, virtually none of the firms in attendance even have a mobile banking product in development. This may end up being a competitive disadvantage in the marketplace or a significant advantage for the two firms who have mobile capabilities today.
• One of the major advantages of a robust AMA product also seems to be a hurdle for product development. Highly customized and information laden paper statements seems to limit product innovation in the areas of rewards, household PFM and product integration. To combat this challenge, Wells Fargo Advisors provides an annual rebate of fees if a customer agrees to a more flexible online statementing option.
• Margaret Henry, Ph.D. (Scantron): Margaret discussed the significant differences between a 'satisfied' client and a client that will be loyal and will refer business to a financial institution. She compared different survey techniques and survey results in the marketplace while sharing results from some of Scantron's clients who have experienced improvements in scores as a result of a robust measurement process.

There was a great deal more learned at this program which I have been lucky enough to present at three times over the past five years. What always amazes me is the amount of sharing that is done by this rather tight knit group of organizations that serve the most desirable of clients.

Banks Slow to Embrace Potential of Tablet Computing

One year ago yesterday, Apple announced it had shipped it's first million iPads. Since then, it sold 14 million more in 2010 and is expected to sell between 30 and 40 million units in 2011 despite supply challenges in Japan. New research from Gartner predicts that global tablet sales will increase from 17.6 million in 2010 to nearly 70 million in 2011 and close to 300 million by 2015. During this time, the average price should fall to about half of the current level, which is just under $500 for entry level models.

Given this growth trajectory, and with banks continuously touting their desire to 'enhance the customer experience', how has the industry completely fallen asleep at the developmental control switch when it come to leveraging the tablet computer for engaging the customer? Given the demographic profile of the early adopting tablet owner (higher income, technology savvy, business traveler), and the retention experience found with mobile banking, it is even more surprising that only a handful of banks have even introduced iPad banking applications.

According to a recent ranking of financial and banking iPad apps by Netbanker, there are only 7 banks ranked in the top 200 apps related to finance and only 2 banks (Chase at #9 and USAA at #20) ranked in the top 20. Chase was not only one of the first banks to develop a native iPad app (as opposed to a converted iPhone app), but they have leveraged the camera included on the iPad2 to facilitate their remote deposit capture service. USAA rebuilt their already industry leading iPhone application for the iPad, providing users with the ability to manage a wide range of financial transactions such as paying bills, transferring funds, placing trades, getting real-time stock quotes and viewing their USAA insurance policies. Members can also electronically add or replace a car on their policy, receive an electronic auto insurance ID card and receive free financial advice in the form of stories and videos customized for a unique iPad experience.

USAA iPad Financial Literacy Library

In the past week, Bank of America also introduced an iPad banking application that leverages the capabilities of tablet computing. Highlights of the new app include an enhanced bill pay calendar, a ledger format for showing account balances, some transactional enhancements and other functions that come closer to mimicking their online banking site as opposed to their mobile banking app. While not providing remote deposit capture capabilities within the iPad app, the app is already ranked in the top 50 in the finance category.

Another bank that was quick to introduce a native iPad banking application with enhanced functionality was BBVA Compass. According to Alex Carriles, SVP and director of mobile and internet strategies for BBVA, "One of the first goals that we had when we decided to develop something for the iPad was to avoid the mistake of looking at the iPad as a large iPhone".

The most noticeable difference between the bank's iPad app and its iPhone app is its appearance. The iPad app's display looks like a bound book with an image of a staple on the center of the page and the image of a ribbon separating different sections. There is a tool that lets customers scroll through images of cashed checks much like albums on iTunes and allows a customer to look at pie charts that illustrate distribution of funds in various accounts.

While a bit cumbersome for everyday transactions such as balance transfers, balance inquiries, and online bill pay, the larger, tactile screen and increased navigation are just perfect for Personal Financial Management (PFM) functions like self-serve wealth management, financial literacy and investing. Many of the more progressive investment firms such as TD Ameritrade and Charles Schwab have already developed robust apps that allow customers to conduct research and conduct more complex transations on the tablet.

In the same way that investment firms can use the enhanced capabilities of the tablet to illustrate charts, graphs and investment recommendations, banks could apply the same logic to engagement and cross-sell messaging and the building of financial dashboards specifically for the iPad. Comparison charts, links to third party financial service firms, illustration of rewards program benefits and even opportunity alerts are perfect for the tablet user. Another unique capability of the tablet is the ability to leverage high definition video or even face-to-face chat in the sales or relationship enhancement process. This provides for an excellent expansion into the small business and commercial customer space where financial advice can be delivered via either online or offline webcasts to executives on the go.

Based on a recent study by eMarketer, tablets provide the perfect online shoping experience where owners are both highly engaged as well as more captive than with smartphone applications.

So, what will it take for more banks to build native tablet banking applications that take advantage of the functionality of the tablet as opposed to trying to expand a mobile app or compress an online banking app onto a tablet? With the introduction of the Blackberry Playbook (with enhanced data security features), numerous Android supported tablets and other players entering the market, how can banks not allocate resources to provide their customers an enhanced experience?

As a avid user of my iPad, I am disappointed my bank has not moved beyond an already market leading online and mobile banking application to support my expanded expectations on my iPad. As was the case with mobile banking, the institution that is first to create the 'WOW' factor will grab the lion's share of the lucrative first adopter market that has already fallen in love with their tablet.

But, I want more than what traditional mobile banking applications can provide. I am looking for financial statistics, financial advice and financial management tools all provided in both an engaging and entertaining package. Kind of like Angry Birds for banking.

Maybe the yet to be introduced BankSimple or MovenBank will surprise me.

Banks Must Develop Apps for Tablet Banking

According to Javelin Strategy and Research's just released third annual report, '2011 Mobile Banking Financial Institution Scorecard - Money Begins to Move on Mobile', tablets are the next wave of technology that will have a major impact on mobile banking. Similar to the smartphone, consumer adoption of the tablet is increasing rapidly and financial institutions will need to quickly accommodate this platform with a user experience that is unique and different from any other platform.

"The tablet is going to be a game changer.", according to Mary Monahan, executive vice president and research director at Javelin who oversaw the development of the new research. "Eight percent are already on a tablet, which is a huge amount when you consider how long the tablet has been out. . . . We think, with the mobile tablet, we will see much more mobile banking. " Link to Bank Info Security interview with Mary Monahan, Tablet: A 'Game Changer for Mobile Banking.

Of the top 25 banks reviewed in the study, 23 offered at least one form of mobile banking services (92%) compared to only 63% in June of last year and 48% in July 2009. In addition, 65% of the banks offered 'triple play' support (SMS text banking, mobile browser and downloadable apps). This was the first time more than half of the top banks supported all types of mobile phones for consumers to access their accounts whenever, wherever and however they wanted.

Financial Institution Mobile Banking Offerings, Javelin Research 2011

Compared to the growth in development of mobile banking applications, the support of downloadable apps for tablets is much slower. According to Javelin, only 30% (7) of the FIs surveyed provided a downloadable tablet app for the iPad, with Bank of America having a 60% market share. No bank currently offers a downloadable app for the Android or any other type of tablet. "FIs need to step up and provide mobile banking services specifically designed for tablets, because that’s where mobile banking is heading.”, said Monahan in an interview. 

The experience definitely needs to be enhanced on the tablet since the consumer will spend more dedicated time on the device at a sitting and expects the interactive capabilities of the device to be fully utilized. Being something of a cross between a computer and a smartphone, tablets benefit greatly from applications being written specifically for them so users can easily move through touchscreen menus. "It's an entirely new kind of device, and needs a new type of user experience to go with it," says Carl Tskahara, vice president of Clairmail. "It can't be smartphone banking, only bigger. And it can't be a shrunken version of online banking.".

One of the main differences between tablets and smartphones when it comes to banking is the time users have (and spend) with the device. Tablet banking is usually done at home where there are fewer user distractions and where a richer visual experience is expected. While banks develop native apps for the tablet, they also will need to make the transition between devices seamless. Citibank, for instance, just relaunched their homepage and online banking application, making the PC experience similar to an iPad application (see video here)

From a perspective of growth potential, 8% of mobile consumers own a tablet (it has only been 18 months since the iPad was released in April 2010). Since the introduction of the iPad, many new tablets have entered the marketplace including Android-based and Windows supported tablets that compete directly with the iPad as well as more moderately priced options such as the Nook Tablet (Wi-Fi and 3G) and soon to be released Kindle Fire (Wi-Fi). These developments are important to watch since Javelin indicates that 51% of current tablet owners have conducted banking on their tablet in the past year, with 34% doing so in the past 7 days.

Brand new research from eMarketer indicates that one in three online consumers will be using a tablet by 2014, representing 90 millions users or 35.6% of all internet users. In addition, the research indicates that iPad growth will continue. And while the share of market will decrease (to 68%), the number of users will double by 2014. Finally, the research indicates that the disparity between male and female users will decrease and that the average age of a tablet user will decrease (due to lower costs).

This holiday season could mark the tipping point for tablet ownership, with Retrevo Research indicating that as many as 69% of consumers are considering the purchase of a tablet. Potentially more interesting, the research finds that 44% would consider buying the smaller Kindle Fire, while 12% say they would not consider anything other than an iPad. This could threaten the tablet ownership dominance enjoyed by Apple and could indicate that tablet ownership is reaching the mass market consumer. 

It was also found that the presence of dual tablet families is increasing, with 20% of current iPad owners indicating they would buy another iPad and 27% saying they may buy a Kindle Fire. The question remains if owners of either the Kindle Fire or Nook will conduct banking on their devices or whether they view them as only e-readers, browsers or game units or if the less expensive units will be for children. 

The demographics of the Fire owner are likely to be different from those of the Apple iPad or other Android tablets, says Monahan. For instance, the age of e-reader owners skews older than that of the more robust tablets, with about 14% being 65 and older compared to 10% who are between 18 and 24 years old. "One of the problems banks will have with this group is that many in the older demographic are content with doing paper banking and are not even online." Monahan says. But as the capabilities and quality of experience of the higher end e-readers continues to increase, the potential to convert this base to mobile/tablet banking increases. 

Intuit Financial Services research found that consumers tend to interact with their financial institution 45% more often if they use a combination of both mobile and online tools. These customer also tended to have larger relationships and a better retention rate. "While we anticipate that there will be some mobile-only consumers, most people will be using multiple devices on any given day in the future," said Intuit spokesperson Tobin Lee in a recent interview. "Financial institutions must be prepared to deliver financial information and insights across multiple devices (PC, phone, tablet), optimized to the merits of each device it they are going to meet customer's needs. If they don't, someone else will . . . probably displacing a bank's relationship."

The desire for 'anywhere app access' was also discussed in one of my previous blogs and just released study from Oracle entitled, Opportunity Calling: The Future of Mobile Communications - Part Two which found that while there was a stronger preference to use a tablet for mobile banking (34%) compared to a mobile phone (11%), the majority of consumers (55%) would prefer to use both devices. This same study found that almost 30% of the U.S. mobile customers that do not already have a tablet device plan to purchase one in the next 12 months.

Obviously, providing a point-and-click online banking experience on a PC is no longer enough. Natural user interfaces need to be developed for newer devices with unique capabilities. Just like the rapid development of apps for phones has occurred over the past two years, banks need to move quickly as consumers seek out slicker and more transformational options on their tablets. While porting an online banking experience on to a tablet may work in the short-run, we need to adjust to a consumer base that lives with touch-based interfaces.

Is your organization building unique user interfaces for tablet banking? Is anyone building a new app for Android supported devices? Is there a market for a tablet banking application for use on the Kindle or Nook?

I would love to hear from you.