Implementing Successful Mobile Banking Solutions: The Four Phase Approach
By Diarmuid Mallon, Senior Product Marketing Manager, mCommerce, Sybase
“Today, Bank A offers text message alerts, while Bank B offers text message alerts, bill payment and money transfers. What’s the difference?”
Mobile Banking Implementation Trends
| Mobile Banking Implementation Trends | | | Past | Present | Future | | Bank
A | | | - SMS Alerts
- WAP and rich client channels
| | Bank
B | | - SMS Alerts
- WAP
- Rich client
| - SMS Alerts
- WAP and rich client
- Mobile payments, mobile wallet, P2P payments, NFC
| | | | |
Mobile banking implementation trends show Banks are rapidly embracing mobile banking services at an accelerated rate. However, as some Banks are pushing ahead in their implementations, others are lagging behind.
In the rush to launch mobile banking services, banks often overlook key strategic technology decisions. While silo, channel-specific services are initially faster to implement, they create limitations as banks move from simple mobile banking services to full mobile commerce offerings. Mobile banking success and failure lies in its technology strategy, understanding the four phases of mobile banking implementation ensures a sound strategy is in place from the beginning.
The Growth of Mobile Banking: Consumers and Banks
The industry has been discussing mobile banking for over a decade now, and finally in 2008 and 2009 we are seeing banks and consumers start to fully exploit this service. Sybase 365’s Global Mobile Banking surveys examined consumer and bank trends and implementations around mobile banking services. Results revealed considerable momentum for mobile banking, with an additional 32% of Banks worldwide expecting to offer mobile banking services in the next 12-24 months. Results also captured consumer enthusiasm with 40% of all bank customers interested in mobile banking, while 25% would consider switching Banks for mobile banking.
As interest in mobile banking continues to gain momentum and banks undertake a variety of strategies to win consumers, Sybase 365 believes it is important to assess where the market is going and what strategies will be most effective. Specifically, what decisions might be made today that can positively, or negatively, affect consumer adoption rates?
The Four Phases: Successfully implementing mobile banking
Today, banks are actively launching and testing a myriad of mobile banking solutions-from simple SMS alerts/notifications, enhanced mobile browsers to complex downloadable rich-client applications. Understanding the four phases for mobile banking implementation helps banks choose appropriate technologies that ensure consumer adoption, monetization opportunities and product enhancement. Breaking out of a single channel approach and offering mobile services by multiple channels in phases that are conducive to consumer adoption will provide long-term, sustained monetization opportunities.
Phase 1 – The New Channel: Addressing the Mobile Channel
Proactively interacting with consumers by simple SMS alerts and notifications allows greater consumer penetration and awareness, leading to successful implementation of more complex mobile banking services in the future.
Strategy: Create consumer awareness.
Implementation: Simple alert/notification SMS push.
Phase 2 – The New Return: Cost savings from the Mobile Channel
As consumers start embracing mobile banking, the next phase is creating interaction – proactive interaction with their banks, with their mobile device. This phase introduces the initial cost-reduction opportunity for banks.
Strategy: Create consumer interaction.
Implementation: Simple interactive services: checking balances, reviewing recent transactions and mini-statements, etc., on single silo platforms (SMS, WAP, rich-client).
Phase 3: The New Growth: Innovative fee based services
As consumer adoption accelerates, the next phase is implementing complex mobile services to monetize the mobile channel. Offering innovative, mobile-channel-only services with fees charged, allow banks to move consumers to the next level of mobile banking.
Strategy: Create interactive services with value.
Implementation: Complex services: funds transfer, bill payments, 2FA, Panic Pay, etc., by upgrading existing platform with WAP or rich-client applications.
Phase 4: The New Value: Mobile Financial Services
This phase culminates mobile financial services, and occurs when consumers are fully engaged and comfortable using mobile devices in their daily financial regimen. This phase allows banks to fully monetize the mobile channel by implementing unconventional financial services.
Strategy: Create broader mobile commerce applications.
Implementation: Advanced services: micro-payments, person-to-person transfers, remittances, top-ups, mobile wallet, NFC transactions, etc., by upgrading existing platform.
Technology considerations
One of the most crucial considerations for mobile banking is technology and the platform a bank implements. As outlined above, each phase in mobile banking implementation requires technology decisions. For example, in Phase 1, banks can choose from an array of messaging aggregators and for a product, consider alert engine options to automate scheduling and delivery of alerts/notifications. It is in Phase 2, is where banks rush to implement solutions that are channel-specific – SMS, WAP or rich-client –thereby commit a critical strategic error. This critical error occurs because successfully navigating to Phase 3; banks should have three things in place:
(1) Fast access to data
(2) Comprehensive model for security
(3) Architectural flexibility
Having silo platforms in Phase 2, makes migrating to Phase 3 technologically challenging, as data, security and architecture attributes have to contend with multiple platforms.
In Phase 2, when implementing a single mobile channel, it’s strategically critical for banks to consider a platform that allows upgrades to multiple mobile channels, without having to change or compromise data access and security integration. Thus, moving towards Phase 3, banks can easily enhance their mobile financial services, without investing considerable capital in re-mapping data access and security integrations to multiple new platforms. Once Phase 3 is in place, advanced architecture flexibility allows easy integration of mobile commerce capabilities for banks to offer a complete spectrum of mobile financial services.
To successfully implement a mobile banking strategy, crucial technology and platform decisions have to be made in Phases 2 and 3 that involve choosing a flexible, comprehensive mobile banking platform that paves the way to Phase 4, mobile commerce, with minimal rework.
As industry experts and studies indicate, Mobile Banking is no longer perceived as an interesting option, but considered an essential business imperative that lays the foundation to more robust mobile payments and mobile commerce offerings in the future. Initiating a mobile strategy that embraces consumer awareness with alerts and notifications, and then moving to more complex mobile banking and payment services allows banks to quickly monetize all mobile financial services. Choosing a mobile financial services platform that easily integrates new services and mobile channels allows banks flexibility and opportunity to embrace the full potential of mobile financial services. The mobile phone represents more than an extension of online banking; it offers an opportunity to reach and meet the changing demands of current and new customers, and Sybase 365’s market-leading end-to-end mobile commerce solutions can help you plan your mobile strategy.
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Learn more about Sybase solutions at: http://www.sybase.com/mobileservices/financial-services
Contact us at: info365@sybase.com
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