The thing you notice about Tracey Weber right away is her ability to localize the universal, to express her job shepherding a vast multichannel mobile banking strategy in a series of simple, enthusiastic anecdotes.
"Here's a personal example," she said over the phone in early May. "You get a message that you need to do something, a credit card bill is due in a few days or the mortgage payment is due. But rather than hoping you remember that later when you get back to your desk or your computer, on a mobile app you can take care of that right away," says Weber, managing director of consumer and Internet mobile banking in North America at Citigroup and one of the driving forces behind a series of smartphone and tablet applications that have garnered high ratings from users.
In describing more than a year's worth of rollouts spanning services as varied as payments, remote deposit capture and the development and design of the first Kindle Fire app, Weber consistently translates enterprisewide strategies into a series of object examples that demonstrate how smartphones and tablets are used generally for business and for leisure, and how that results in an outcome that marries financial functionality, creative design and user tastes. In a discussion of gamification and content sharing, for example: "My daughter and I play Scrabble on tablets all the time. There's an interesting opportunity in this for financial services to leverage that ability of the tablet to easily connect you with someone else for financial purposes."
As Citi's mobile strategy has evolved, old-school project management has been replaced by agile techniques to enable quick response. Weber has helped bring market research, analysis, outside partners and relatively small cross-disciplinary internal development teams together to act quickly as new digital opportunities, such as GPS, deposits or personal financial management arrive. "When you are out doing something during the normal course of the day, we want to make sure we are continually there with functions that make banking accessible and informative," she says.
The inclination to match consumer comfort with new technology comes naturally for Weber, who joined Citigroup in 2010 after working as an executive in positions that frequently combined digital commerce with mass retail. Like Frank Eliason, who was brought in from Comcast to punch up Citi's social media strategy, Weber brings a different industry perspective. Weber, who holds a bachelor of arts from Harvard University and an MBA from the Wharton School of Business, has been executive vice president, textbooks and digital education for Barnes & Noble, and she was North American chief operating officerat Travelocity, where she oversaw air, car and last-minute deals.
"Having been in e-commerce for a long time helps me in this environment. Since I came from a consumer-oriented business, I came to Citi with the idea of putting ourselves in the shoes of our customers," she says.
TRENDSETTERS
There's more to that strategy than intuition, a resume and personal anecdotes. At Citigroup, Weber has helped introduce a number of mobile and tablet apps, helped by teams of internal staff that vary in expertise - such as marketing, technology and risk - and external partners such as Fjord, the consulting brains behind digital content from companies such as the British Broadcasting Corp. and Qualcomm, and the host of seminars such as "Future Female, the Transformational Tablet" - for a "Finnish network of like-minded women inspired by new ideas in the world of digital opportunity."
In early 2011, Citi introduced a mobile banking platform that allowed users to check balances, control cash flows, pay bills, transfer funds, access rewards and find local ATMs and branches. Other additions soon followed based on what the bank learned about use patterns, performance, customer feedback and an over-arching business strategy to add more digital service and reduce paper. The bank added social media and click-to-call/chat via Twitter. Citigroup was one of the first banks to engage customers that mention Citi on Twitter, even if the customers don't reach out directly to the bank, and it also allows customers to switch from Twitter to nonpublic communications by computer or smartphone. Citi also launched the first consumer banking app for the iPad, and was the first bank to offer access to Twitter customer support via its tablet app.
And along with Bank of America, Citi was also among the initial banks to offer a Kindle Fire app. Other new recent additions are mobile deposit capture and person-to-person payments.
While the bank didn't reveal actual numbers of users, there has been strong growth. There has been an 80% increase in mobile users and a 170% increase in mobile money transfers in less than a year. Weber attributes the success to the development teams, which allow the bank to provide new capabilities and make consumers aware of the benefits of mobile banking in a well-timed way. "The speed to market is very important. Mobile tech is changing so quickly. And you're learning about the customer needs. That's the benefit of being out there quickly. You can respond to how customers are engaging the product," she says.
Research on mobile devices informs not only development, but also how mobility is marketed and explained to users. Citigroup's customer-facing staff, for example, is educated on how to use the mobile devices so they can explain them to consumers. While mobile devices are popular in general, many consumers are not fully aware of how well-developed mobile banking apps are, with mobile check deposit perhaps being the best example. It's a perception problem. In many cases, the roadblock to adoption is the belief among consumers that mobile apps such as mobile check deposit or tablet personal financial management apps are more difficult to use than they actually are. "Many consumers are not quite sure...they ask themselves, 'Do I want to use this mobile device and what will it do for me?'" Weber says.
Weber says that by having branch personnel readily able to explain how to use products, or by incorporating easily accessed instructional materials into the content of the mobile app, the tech hurdles to adoption are easier to overcome. "If users go to the mobile optimized browser, we have information about how to use it, how to download it and the value proposition," Weber says.
TAKING TO TABLETS
Citi has gained particular attention for its new tablet apps. It debuted its first iPad app late last year, and this spring rolled out one for the Kindle Fire. "We saw late last year that the Kindle Fire would be a big seller, so we made sure we had the right customer experience for it, including interactive charts of past and future payments and transfers, analysis of personal spending habits and real-time customer service," Weber says.
The tablet team, which included people from Fjord and Citi employees of varied departments and experience, brainstormed on function and appearance for app features. They then came up with ideas for the apps and drew them up as storyboards before development. The results have been positive thus far. Two thirds of the app store ratings are four or five stars and the bank reports an average of more than four pages per user session. It also was introduced into the App Store staff favorites section five weeks after launch.
"I think Citi's choice to build a Kindle Fire native app in addition to its iPad app is a smart strategic choice. It is a natural progression from their tablet banking strategy from the start," says Peter Wannemacher, an analyst at Forrester Research.
In a Forrester study on Citi's tablet strategy, the research firm made particular note of the bank's placement of features on tablets that may not be found on other touchpoints, such as a log-in that makes full use of the tablet's screen and offers the ability to remember the user's information; a single view of account; tutorials; and a drilled-down analysis of PFM-type information. Other features include peer comparisons that can be customized via a drop-down menu; and a screen that lets the user flip or slide to an activity via on-screen navigation.
"It's very early on, but tablet banking seems to combine a unique blend of intimacy and usability," Wannemacher says. "As for what early entrants into this space are gaining, I actually think the most important benefit is not the early to market buzz - though that does demonstrate value and differentiate the brand - but is in fact the lessons and insights they will get out of it. Starting out on that learning curve early can be enormously beneficial in the long run."
Game Changers
State Farm Bank, BMO and USAA are experimenting with mobile payment initiatives and tying banking to e-commerce
When it comes to mobile banking, the term "emerging channel" no longer applies. General consumer use of mobile devices has just about caught up to the Web, in a fraction of the time. ComScore recently reported that more than 75% of mobile banking users interact with their mobile device at least once per week, which is similar to the engagement frequency for online banking. And Ericsson recently reported that 90% of smartphone owners carry their mobile devices with them - as opposed to 80% saying they bring money.
"I don't know the last time I went to a branch, it's who we are as consumers today. We are constantly busy," says Andrea O'Connor, customer experience vice president for State Farm Bank.
O'Connor is among the new visionaries who are emerging to take advantage of mobile's fast maturation - executives who are moving their institutions quickly forward into the new channel.
These executives have discovered the real killer app to win the future of mobile: e-commerce - making it easy for people to receive money, move it around and shop for places to spend it. That's the lure that brings consumers into mobile banking and solidifies vital relationships. The best wallet share will come from offering the best mobile wallet. "Our research shows that customer retention increases the more an institution makes use of the mobile device," says Andy Schmidt, a research direct for CEB TowerGroup.
We spoke with three of these top execs - O'Connor; USAA's assistant vice president of emerging channels, Neff Hudson; and Bank of Montreal's vice president of payment products, David Heatherly - about their organizations' successes and their plans for the mobile channel.
TIME FOR DEPOSITS
Check deposit is becoming one of the most popular uses of mobile phones - the ability to deposit a check with a snap of a smartphone camera is proving to be an enticement that few consumers can resist, once they learn how it works.
"Every RDC pilot that I'm aware of has exceeded expectations in terms of value and adoption," Schmidt says. "It's a brilliant strategy to outsource checks to the handset. It allows the bank to process an image instead of paper," Schmidt says.
One of the most successful mobile RDC apps has been State Farm's MyTime Deposit, which enables deposits from almost anywhere, a key element for a bank that doesn't have a substantial branch footprint.
During the first 30 days of MyTime Deposit's launch in 2010, about 4,300 deposits were made for a total of $2.5 million. That growth rate accelerated after O'Connor and her staff noticed that 14 percent of remote deposits were declined each month, with nearly 40 percent due to poor image quality. O'Connor's staff adjusted to the problem, creating step by step videos and online demos to allow customers to visualize the process by navigating though a variety of topics, such as MyTime Deposit; transfers; and bill payment.
The educational effort paid off. In the past year, the $14.7 billion-asset State Farm Bank recorded a 77 percent increase in deposits and executed nearly 20,000 deposits in February 2012 totaling more than $11 million. "We always have our phones with us, so why not make a deposit with a check part of what you're doing that day?" O'Connor says.
State Farm Bank develops new mobile tech as part of State Farm's Enterprise Internet Solutions and Systems Departments to build and host the applications. While the bank is not a huge part of the insurance firm's total enterprise, the receptiveness to mobile banking apps has led the corporate parent to give the banking unit the green light to develop mobile strategy, which sets the pace for the rest of the business.
Up next for State Farm Bank is a mobile wallet, which is being tested internally. O'Connor says the tests have gone well, though like most banks, State Farm is still waiting on standards for mobile payments processing to develop. The lack of such standards requires agility in development. "The word is still out on payments, there are so many unanswered questions," O'Connor says of the uncertainty over whether NFC or some other model will drive mobile payments going forward. "You have to try new things, to get folks internally comfortable."
CONTACTING PAYMENTS
Like State Farm Bank's O'Connor, the tight relationship between people and their smartphones is illuminating and personal for BMO's David Heatherly. "The phone is in your hand, you have it all the time. For me, I would notice my phone was gone before I would notice my wallet was gone," Heatherly says.
Heatherly helped lead the BMO mobile PayPass tag initiative launched in September, making the $538 billion-asset BMO the first Canadian bank to roll out a Tap and Go payment solution for mobile phones. A mobile tag issued to consumers provides the ability to use their mobile phone to make payments, as well as monitor spending with email notifications of transactions and merchant locations.
PayPass is already embedded in more than 7 million of BMO's MasterCard credit cards, and more than 50,000 mobile tags were introduced in 2011. A substantial number of merchants are also on board. More than 19,000 locations in Canada accept PayPass tags, including large retail chains such as Toys R US, Staples, Petrol Canada, McDonald's and Tim Horton's.
In the future, Heatherly envisions using the phone's embedded capabilities as part of a marketing strategy that also includes loyalty, payments and shopping.
"The future is really an integrated shopping experience. If you're in a store, certain pieces of merchandise will have coupons. You pick up a product, tap the phone against the reader, and it loads the coupon. You go all the way from shopping to checkout to coupon redemption," Heatherly says.
GPS integrated with barcode readers is another future initiative, allowing shoppers to find out if a different version of a product is available at another nearby location within the merchant's chain. Also on the drawing board is using CRM and the phone's location-based technology to tie user transaction data and profiles to coupons and loyalty function.
"You have the merchant and the bank and user working together, sending something to the customer that is unique to the customer," Heatherly says.
USAA'S TURNKEY SHOPPER
USAA is frequently on the leading edge of new digital banking because of its remote customer base of military personnel - people who are frequently on the move and amenable to digital products at an earlier stage.
For Neff Hudson, that makes the $104 billion-asset financial service company's Auto Circle program tailor made for the mobile channel.
"Our goal is to put USAA in the palm of your hand when you are at the car dealership," Hudson says.
When they use Auto Circle, which exists in USAA's family of mobile and online apps alongside other services like Home Circle, consumers leverage aggregated research from sources such as newcartestdrive.com, Kelley Blue Book and TrueCar.com. Users can also access social tools that provide member-produced ratings and feedback from other members. Consumers use the app to apply for new car financing and to execute dealer electronic funds transfers from their smartphones. Insurance applications are also available via mobile.
"Our emphasis was to make it easier to find the dealership and provide preapproval, which gives you power in negotiating," Hudson says. The company didn't reveal specific adoption numbers for Auto Circle, but says the mobile app has gotten positive reviews thus far. "People are telling us it takes the hassle out of buying a new car," he says.
Another feature is the USAA Preferred program, a new vehicle rating system that designates certain vehicles based on safety reports, MSRP, fuel efficiency, insurance costs and depreciation. These vehicles get a USAA seal denoting the bank believes that car is a good value. Hudson says this helps with shopping since many of USAA's customers are new in a community, and visiting the closest auto dealership to a military base doesn't always guarantee the best deal. "Also if you are walking around with the proof of financing in your pocket, you have all you need to close the loan," Hudson says.
Hudson says next step for the app is to enhance the connectivity between the smartphone's photo capabilities and the actual financial app. People can take and store photos of cars now, but Hudson wants to add more heft to that option. USAA also plans to add used cars, which are currently only available on the web version of Auto Circle.
Internal Evangelists
At First Tennessee, Regions Bank and BBVA Compass, getting employees enthused about new mobile technology is boosting consumer adoption
No reputable company would ask staff to sell a new product without first providing training on how to use it. But mobile banking is a special case, one in which skills combined with a genuine personal excitement about cool new apps among the sales and service staff can go a long way toward getting buy in from customers.
First Tennessee's Dan Marks, Regions Bank's Stephen Lamar and BBVA Compass's Alejandro Carriles are three executives deftly putting that idea into practice. "We engaged employees really early on," says Marks, CMO of First Tennessee Bank (FTB), who says new mobile releases are beta tested with employees. "It makes sure they have confidence when talking about the new apps with customers. The staff can talk from personal experience." Ensuring enthusiasm among staff is part of the overall marketing effort at the $25 billion First Tennessee, which Marks credits with helping drive impressive adoption numbers for mobile banking. In 2010, FTB had no mobile presence and Marks was assigned to boost mobile and other digital efforts. Mobile banking was introduced in 2011 and adoption thus far has been twice as fast as anticipated.
At FTB, mobile marketing also includes cross-channel messaging touting the utility of mobile that's embedded in other, mostly digital marketing pitches in appropriate venues. For instance, the bank, which offers text, browser and native apps, uses email and ATMs as venues to pitch mobile banking. "When people come to ATMs, they are already doing a transaction electronically. We want to make them aware of a better way to accomplish that," Marks says.
FTB also decided to tie mobile authentication and enrollment to online banking, a subject of some debate among banks, some of which have started to offer mobile enrollment separate from online banking. "Half of our customers use online banking. That had a big impact because it allowed existing customers to log in and not have to go through an extra log- in process for mobile," Marks says.
Regions Bank, which began to revamp its mobile banking program in 2011 via a migration to a Clairmail platform that includes text, mobile web and smartphone apps, is also riding staff evangelism to success. Regions began 2011 with just three percent of the customer base actively using mobile, a number that had jumped to more than 15 percent in mid-May. In addition to targeted email and calling campaigns, Regions focused in internal marketing efforts, creating multiple associate campaigns to ensure employees could introduce mobile and explain it based on their own use. "There was little to no traditional marketing, no radio or commercial," says Lamar, senior vice president of ebusiness product and channel management at the $127 billion-assets Regions Bank.
Lamar says that without a huge budget to market mobile banking, Regions turned to a grass roots approach, training associates and instilling a first-hand passion. "A lot didn't know it was that easy, that they could transfer funds via a text message," Lamar says. "Knowing it's that easy comes across then you are speaking to a customer."
Regions' strategy is to pitch mobile as a way to deflect the portion of call center and teller traffic that's taken up by simple problem solving and basic transactions. Training was done with a focus on getting internal staff to explain how these tasks can be accomplished in the mobile channel. "We didn't want to do simple talking sheets saying 'here's what it does.' We wanted everyone to start using mobile banking. Once [front line staff] started using it, you could see the difference. It's powerful when someone can say, 'You can use mobile to do xyz. Here's how I do it myself,'" Lamar says. Actual marketing around mobile banking is still rare among banks. "Marketing mobile to non-mobile users to get them to use mobile banking and marketing on the mobile device are two different things. As far as marketing other things via the mobile app, we're not there yet," says Bart Narter, an senior vice president at Celent. "Banks are still doing basic features and functionality on mobile. Cross-selling is a bit more complex."
KEEPING IT SIMPLE
At BBVA Compass, Alejandro Carriles, executive vice president and director of mobile strategy and retail innovation, worked with his team to explain to a customer in five words or less how to enroll in mobile banking.
The result was a "text to download" marketing campaign. The user sends a text message to "4BBVA" and receives a link to a detailed page on how to get registered and begin to use mobile banking - more than 40 percent of mobile enrollment has come from the text-to-download program.
The campaign's success can be seen in the adoption of mobile banking. In the past two years, registered mobile users grew more than 500 percent and now make up 16.7 percent of the total customer base - putting mobile on pace to surpass online banking in the short term.
BBVA's latest strategy to further distinguish mobile and online channel is through its version 2.0 iPhone app, which lets customers enroll directly from their phone, even if they don't have an online banking account. In an earlier interview with BTN, Carriles said that by allowing mobile banking enrollment by non-web consumers, a wider market results.
"With online banking penetration from 40 percent of users, you're leaving out the 40 to 60 percent of customers who don't use online banking. Younger generations are going to skip online banking altogether and go straight to mobile."
Mobile Payments Projects Around the US
The mobile wallet is coming to the U.S. and trials are taking place in most states. We home in on a few promising initiatives
STARBUCKS PAYMENTS
Seattle, WA
A contactless payments pioneer in the U.S., Starbucks has also partnered with Visa and Barclaycard to test contactless payments in the U.K., with beta tests in London and potential larger deployment through the rest of the country. Purchase limits will initially be about $24.
CHIRPIFY
Portland, OR
Fresh off a $1.3 billion investment, Chirpify allows social media payments via Tweets of commands such as "pay" and "buy." Its clients include a Minneapolis hip-hop record label called Rhymesayers.
ISIS
Salt Lake City, UT
In an initial pilot scheduled for this spring, the AT&T, Verizon and T-Mobile contactless payments consortium will test near field communication (NFC) payments on buses and other transit in Salt Lake City. Other pilot cities include Austin.
SQUARE
San Francisco, CA
Square's app in 2012 has become popular among politicians as a way to quickly raise money while at public events; it's also gained traction among small businesses and charities.
INTUIT GOPAYMENT
Mountain View, CA
Intuit's GoPayment, like Square, is a small card reader that attaches to a smartphone. In November, Intuit launched a prepaid card for merchants to deposit their GoPayment sales.
GOOGLE WALLET
Mountain View, CA
The Google Wallet, whose partners include Citigroup, MasterCard, Visa and First Data, told BTN it plans to expand its APIs this year to make it easier for banks and firms such as Groupon to interact with the mobile payment app.
PAYPAL
San Jose, CA
The payment firm's saturation strategy includes a new mobile payment app that targets small merchants by helping them accept any payment through a PayPal account.
AISLEBUYER
Palo Alto, CA
Intuit's purchase of AisleBuyer in April will help Intuit expand its moves into mobile self-checkout technology.
FLINT MOBILE
Redwood City, CA
This startup is beta-testing an iPhone app that lets small merchants accept payments by capturing an image of the customer's Visa or MasterCard number and turning that into an encrypted account number. The app also helps merchants get started on social media sites such as Twitter and Facebook by providing a simple link to "like" the merchant on those sites.
WESCOM CREDIT UNION
Pasadena, CA
Wescom Resources has integrated the PayPal Send Money for Financial Institutions service into its MemberEdge Mobile Banking solution, which is available to credit unions nationwide. End users can pay anyone, anywhere, with an email address or mobile number directly from their mobile banking application.
DWOLLA
Des Moines, IA
Ashton Kutcher is among the investors in Dwolla, a low-cost payment firm that allows users to transfer money by using a mobile phone or the internet.
MBTA
Boston, MA
The Massachusetts Bay Transportation Authority, which operates the T, has partnered with Masabi, a London-based payment tech firm, to allow commuters to purchase fares directly on iPhones or other mobile devices, with payments integrated with existing contactless payment systems and monthly transportation passes. Proof of payment shows up on the phone's screen, which will also display a bar code to be scanned if more proof is needed.
BUMP
Toronto, Canada
Bump Pay, which is currently available for the iPhone through a Bump Technologies subsidiary called Bump Labs, enables two smartphones using Bump apps to transfer card or account payments data by tapping against each other. The transactions require physical contact, rather than the near-field communication wireless technology that drives most tap-and-pay mobile phone payments.
JPMORGAN CHASE
New York, NY
Chase's RDC app is just as much about the power of advertising as it is about the tech. It's national campaign has made photo check deposits part of the conversation. KeyBank's Dean Ilijisic says his bank, which is plotting a move into mobile RDC, is often asked by consumers, "When are you going to have the app where you take pictures of checks."
CAPITAL ONE
McLean, VA
Along with Barclaycard, Capital One has signed to be a partner in the ISIS consortium, giving the effort a major boost as it launches later this year.
CLEARXCHANGE
Charlotte, NC
The Wells Fargo, Bank of America and JPM-backed ClearXChange, which launched in 2011, is targeting PayPal by allowing consumers to send money directly from their bank accounts using an email address or a mobile phone number.
WALMART
Bentonville, AK
Target and Walmart are working together to develop their own mobile payments system. The system will also include about a dozen other retailers.
