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Business clients that receive thousands of checks per month typically can't get automated bulk check processing services from a small bank. And if the services matter to those clients, the small banks lose their business to larger rivals.
May 9
After some fits and starts, Farmers & Merchants Bank (FMBL) is now plowing into mobility and imaging via the deployment of a series of mobile services and an upgrade to its ATMs.
The Long Beach, Calif.-based institution was slow out of the gate; many banks have been offering mobile banking for some time. But it's making up for lost time. Basic mobile services such as transfers are on the menu, as well as new payments and tablet applications. At the same time, the bank is also reconsidering its fee structure for all of the new services, as well as additional functions such as PFM and mobile payments.
Ken Nagel, senior vice president and chief information officer for the $4.7 bank, this week spoke with BTN about the bank's new mobile strategy, the timing of deployment, enhancements to its ATMs, and how it all fits into the bank's larger technology plan.
BTN: What's in the new mobile app?
Nagel: We just released our first version, so it's pretty straightforward transactions for retail customers. There's the normal balance transfers in addition to mobile deposits. We'll add bill payment later. Right now we wanted to get it out there.
A number of banks have been offering mobile for some time. What made you decide to get in now?
We've been trying to get a mobile platform out there for a while. There initially was a vendor that didn't work out, and then there was an online banking vendor app that didn't meet our requirements. Now it's become part of our long-term strategic IT plan to increase function in every channel, and to make the mobile device more transactional.
Who are you partnering with now?
mFoundry is the [mobile tech provider]. They integrate directly into our core system, so we leveraged their platform for the mobile application and our core system for transactions.
How does mobile fit in with other channels?
The other additions we just made include image-based ATMs, which [strategically pair] with image-based mobile deposits. It's a convenience play and it's also less costly than depending on other channels. We will be adding additional transactions, since our customers are favoring digital channels. Up to 30% of our customer footprint is now going to electronic channels.
How do the "smart" ATMs work?
We just finished upgrading our entire ATM network so they are all image-based. So customers can scan checks and it will make deposits, working like mobile remote deposit. There's a low volume right now, but the convenience factor should lead to an increase.
Is there other embedded technology in the mobile device that you find promising?
The most common is the location-based capability. We can see it used to find branches or ATMs. Using the phone to execute person to person payments is also something we're looking at.
Are you interested in becoming an issuer for near-field communication (NFC) contactless payments?
We're keeping an eye on it to see what the industry does, what kind of direction the market takes in terms of a tech model. mFoundry did the Starbucks and BofA [NFC payments apps], so we would be able to move quickly.
What else is part of the tech plan?
We're are releasing an iPad application and will extend mobile function in the next year for commercial customers. We're also developing a personal financial management function, similar to Mint and other sites.
How do you view mobile as a source of fees?
There's some opportunity for fee income, with mobile deposit and for some of the cash management functions. But for most of the general transaction functions [which will likely remain free], it's the price of doing business in mobile.
