Mobile Banking Myopia

The following is from an article in Bank Director about mobile banking:

“The early adopters are not charging for their mobile services and have not placed much emphasis on achieving a specific return on investment. Rather the business plans are built around the theory that mobile banking will become commonplace, and it makes sense to prepare for it. “How do you get payback on an ATM?” says Lockwood of United Bank, suggesting that mobile devices are just another channel through which to distribute information. Payback will happen over time, as younger customers in particular become attached to the service and develop deeper relationships with the bank because of it, he says.”

My take: What’s that saying about those who don’t understand history are destined to repeat it?

The line of thinking that “payback will happen over time as [fill-in-the-blank-customer-segment] become attached and develop deeper relationships” has been used over and over, with ATM, home banking, online banking, online bill payment, eBills, etc. And never has the “attach and deepen” promise ever been realized.

But I’m not critiquing this line of thought as a way to argue against the implementation of mobile banking capabilities. The bigger issue is the myopic thinking surrounding the industry’s discussion of mobile banking.

Seven years ago I wrote a research brief exhorting banks to kill their mobile banking development efforts. I didn’t believe then that consumer demand was strong enough to warrant it, and, more importantly, I believed that there were more important priorities for banks to focus on.

Surprisingly, seven years down the road, consumer research continues to show negligible demand for mobile banking. Aite Group’s research has found that just 5% of consumers say they use mobile banking capabilities today, with 70% saying that they’re flat out not interested.

But this time around I’m not convinced that mobile banking should be ignored. It has nothing to do with consumer demand or “attach and deepen”, however.

Many industry observers views are too myopic. The naysayers point to anemic consumer interest and say “see, nobody wants it.” The supporters say “it’s the way of the future, and people will want it down the road, especially younger consumers.” The latter group then proceed on figuring out how to take online banking features and port them to cell phones.

What we have are two views of mobile banking: The marketing view and the technology view. What’s missing is the strategic view. What I don’t hear anyone asking is:

  • What would banking look like if the cell phone was customers’ primary form of interface and contact?
  • How would we reengineer business processes if the phone was the only way customers interacted?

I don’t mean to insult the technologists, but too many are wrapped up trying to dream up new features for mobile banking. Many marketers, on the other hand, either have their heads in the weeds, bogged down by market research numbers, or in the clouds, deluded by dreams of attachment and deepened relationships. And then there are the strategy folks who seem to be focused on which bank they should acquire next.

If banks want to succeed with mobile banking, it’s time for some more strategic thinking on the topic.

Technorati Tags: Marketing, Banking, Mobile Banking

This article was originally published on . All content © 2022 by The Financial Brand and may not be reproduced by any means without permission.