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New web and mobile research says most banks are planning to develop downloadable mobile banking apps. But they aren't vigorously marketing the channel.
September 1
S&T Bank's plowing into mobile banking in a major way, adding a new S&T mobile banking app for iPhone, Android and Blackberry. But it's also bullish on its browser-based services, which are still of almost equal popularity to smartphone apps.
"We're not at the point yet where we can pick the platform…no one can know for sure who's going to win, so you have to give customers some choice," says Rob Jorgenson, an svp at S&T, a $4.1 billion asset bank that serves a region in and around Indiana, Pa.
Jorgenson, whose bank licensed tech from FIS for the new mobile rollout, says that user adoption of both native apps and browser based mobile banking is about equal. The bank's earlier incarnation of mobile banking was limited to access via a web browser.
By adding smartphone apps, the bank is expanding its mobile services beyond the rudimentary balance queries and transfers to a mobile-specific range of financial services that mostly matches in capability what the bank offers on its website.
The banking industry's move from browser- and text-based mobile apps to "native" apps for smartphones was expected to happen quickly, given the popularity of new smartphones. But older means of accessing mobile financial services are hanging on, and as smaller banks and credit unions start to add smartphone mobile banking apps, they're not engaging in a migration strategy that favors smartphones.
While native apps can offer more services and are generally considered easier to navigate than browser services, many banks are still vigorously pushing browser based services, which offer some of the most common financial services accessed via the mobile channel, which are available on almost all mobile handsets.
Research suggests a majority of banks plan to introduce downloadable smartphone apps over the next year or so,
"Our approach is not to make technology judgments where we don't have to for our customers," Jorgenson says. "Not everyone has a smartphone."
Mike Salerno, e-service manager for America First Credit Union, a $5 billion-asset, 555,000 member Salt Lake City-based credit union that recently upgraded its mobile banking service to include SMS, browser and downloadable apps for Android or iPhone through Fiserv's Mobiliti platform, says the browser/text/app mix has been helpful in driving adoption.
The credit union had previously offered only a mobile banking app. Within five weeks of an expanded service to include browser access late this past summer, the credit union signed up 25,000 new users, up from the 13,500 users of its old app.
"Our app-only mobile banking service was available via certain mobile carriers, and there was pent-up demand for mobile banking among the broader AFCU member base," Salerno says. "With Mobiliti, AFCU now supports mobile banking via more carriers and more devices, so we can meet that demand."
Mobile tech providers say native apps are expanding in use, but still recommend a mix.
"Demand for our browser-based mobile services amongst our financial institution clients is high because they want to provide the greatest possible reach and offer their customers choice," says Adam Clark, svp and general manager for mobile solutions at Fiserv. "Native apps remain the most adopted in terms of actual consumer use."
Drew Sievers, CEO of mFoundry, says there is movement toward native apps.
"Over the past few years, clients have moved from being text focused to being app focused. The level of customer interaction in mobile banking is just so much higher when an application is used versus text," he says. "Mobile web is still a great way to fill in the experience on non-key platforms. However, when we give users a choice between mobile web and an app on iOS or Android, they will mostly use the app, since they want a richer, easier experience. On non-core operating systems like WebOS and Window Phone 7, a rich browser solution can provide a quality experience until there is a commercial reason to build an app."
Sievers also says that "overall, banks and credit unions want all three modes for their customers: app, mobile web, and text. We almost never see a client asking only for mobile web. Doing so would mean leaving a lot of users on the sideline without a compelling offering."
