Just a handful of U.S. banks have released applications that allow consumers to use tablets for mobile banking, among them Bank of America and BBVA Compass. But given the devices' growing popularity, it's unlikely tablets will stay on the fringes of the industry for much longer. According to Forrester, 10.3 million units were sold in 2010 and analysts expect that number to more than double to 24.1 million this year. Those are impressive numbers, but it's still understandable that more banks have not yet rolled out applications. Tablets have been around for a very short time. Apple's iPad debuted only in 2010 and was soon followed by RIM's Playbook and various Android enabled devices.
Tablets could transform the consumer relationship if banks adroitly marry the device with personal financial management (PFM). To be more specific, they need to offer budgeting, goal-setting, alerts and advice in a real-time, tailored, interactive dashboard format.
Given how few banks offer tablet banking and their slow adoption of PFM, which has so far remained on the fringes of bank offerings, proposing that the two link up might sound premature. But banks need to position themselves to take advantage of convergence.
"The market for consumer-direct PFM solutions has exploded over the last few years, with vendors including Mint.com, Strands and Yodlee offering rich and useful applications," says Jacob Jegher, a senior analyst at Celent. (Yodlee surpassed the 30 million mark of registered users in July.) Meanwhile, a Forrester study found that 75% of consumers would like their primary financial institution to offer PFM.
Today, most banks that have PFM offer a bolt-on solution from companies such as Inuit's FinanceWorks. The functionality is good but it often creates a disconnected customer experience. "Solutions open up in new browser windows, have different interfaces, menu structures, navigation, look/feel, etc.," Jegher writes in a report. Some banks have graduated from the bolt-on approach to offering PFM within online banking. The user experience is still different, but PFM is not a separate solution.
Ultimately, Jegher argues that PFM needs to become a core component of online banking. Transactional features and functions should be built around the PFM dashboard allowing banks to collect account and transaction information, analyze data, create campaigns and intelligently cross-sell bank products. The trouble is, this level of PFM requires a complete overhaul and redesign.
But there may be a shortcut: Tablets. Emmett Higdon, principal at Prizm Strategy, says the tablet offers several key advantages over PC-based banking and smart phones when it comes to integrating PFM. Tablets literally offer banks a clean slate (no pun intended). "They can rethink from the ground up, building functionality through the tablet," he says. "For instance, they can leverage the extra space for more information. We will see the full gamut of online banking, but with more functionality and transactional activity than on the smart phone."
Tying the tablet application to the bank's core will require hard work, but Higdon argues the technology is proven. Vendors such as Yodlee have been using middleware to integrate with banks' back-end systems for 10 years. The real hurdle has been rearchitecting the user interface to accommodate PFM, and it's the interface that tablets so greatly improve.
Unlike a PC, tablets have touch-screens, allowing users to easily move through the application with a touch or swipe. This interactivity, plus the large size of the tablet screen, makes dashboard design possible. Dashboards vastly improve the user experience, Jegher says, but touch-screen dashboards aren't possible on PCs and are too space-limited on smart phones. "Eventually, PFM will be online banking," Jegher predicts. "It will be one single solution with a dashboard experience. And that's perfectly suited to the tablet."
Higdon adds that the fusion of tablets and PFM could change the entire banking experience and relationship. "It used to be that online banking influenced mobile banking. But the tables are turning. Tablets will be a proving ground for future online designs."
