Corporate America Discovers Payments - Digital Transactions

M-COMMERCEDecember 2009 digitaltransactionsSix Keys to Driving upAdoption for Mobile BankingDave GallowayBanks that want to maximize their return on the dollars they investin the mobile channel must focus on maximizing the percentage ofcustomers who adopt and use the product. Here are half a dozenpractical ways to do that.Mobile banking is becoming astandard offering for financialinstitutions of all sizes.Mobile deployments grew by 44% in2008 and are expected to double in2009, according to Aite Group LLC,a Boston-based research firm.In addition, TowerGroup, a Wal tham,Mass., research firm, estimates that thenumber of active mobile-banking userswill grow from 10 million in 2009 toover 53 million in 2013, representinga compound annual growth rate(CAGR) of 51.8%. A forecast fromJavelin Strategy & Research, Pleasanton,Calif., is even more optimistic,projecting 108 million mobile-bankingcustomers by 2012.Given the enormous potential atstake, selecting the right mobile-bankingsolution is obviously an importantstrategic decision for any financialinstitution. A crucial factor in thischoice is customer adoption.Regardless of whether mobilebanking is intended to lower costs,reduce fraud, increase offer acceptance,enhance acquisition, or improveretention, a strategy for maximizingadoption and usage should bethe fundamental consideration. Here’swhy: The return on investment that afinancial institution sees from mobilebanking will directly correlate withthe percentage of customer enrollmentand usage of the solution.To maximize adoption and usage,financial institutions should ensure thattheir mobile-banking solution includesthe following six key drivers:1. Target 100% Coverage: Financialinstitutions should make their mobilebanking solution available to all customersby opening enrollment to multiplechannels, not just online banking.Most mobile-banking solutionstoday involve extending services toonline-banking (OLB) customers as anext step in the evolution of the selfservicebusiness model. For manymobile-banking solutions, the onlyenrollment vehicle is through the useof existing credentials on the financialinstitution’s OLB Web site, whichautomatically restricts mobile bankingto OLB customers.The inherent problem is that thisapproach is much too limiting. Accordingto Online Banking Report, “Onlinebanking has reached the point in theadoption curve where the overall marketgrowth is relatively flat.” Indeed, OLBadoption among U.S. households hashit a plateau, leveling off at the low-tomid30% range for four years running.Even if recent reports showing a modestuptick in OLB usage are true, it wouldbe logical to assume that most financialinstitutions would still be, at best, in the40% range for OLB enrollment.Financial institutions relying onthis approach risk never climbing overthe adoption wall intrinsic with OLB.In fact, with mobile-banking adoptionrates for this approach typically toppingout at 10% to 20% of OLB users,financial institutions counting on anOLB-dependent strategy can realisticallyexpect to reach only 4% to 8%of their total customer base.To maximize adoption and usage,financial institutions should enableenrollment through multiple channels,including online, branch locations,contact centers, ATMs, InteractiveVoice Response (IVR) systems, ordirectly on a mobile device.2. Enable Customers to PersonalizeMobile Banking: Financial institutionsshould select a solution that allows customersto fit mobile banking with theirpersonal and professional lifestyles.Because mobile offers the greatest levelof personalization of any banking channel,customers should be empowered totailor their mobile-banking experienceto suit their own preferences.An effective mobile solution givescustomers the flexibility to performmobile banking their way, so that itseamlessly aligns with their personalhabits and meets their individual32 digitalDecember 2009