For banks and credit unions, the ability to capture a photo of a bill can also capture the attention of consumers and increase mobile engagement.
Facebook isn’t just satisfied with having more users than any other social media in the world. They’re craving their piece of the future of mobile payments. With the recent announcement to offer peer-to-peer payments through its Messenger app, Facebook is seeking to establish a deeper connection to users’ finances and to take a bite out of traditional financial transactions.
Originally posted on CUBroadcast.com April 7, 2015
According to StrategyCorps Partner Dave DeFazio, there are five mobile banking "must haves" today:
- Mobile banking
- Mobile bill pay
- Mobile deposits
- ATM/branch locator
- P2P payments
If you have those, you are meeting the needs of today's increasingly mobile consumer. If not, you better get on the stick. But, as we all know, the FI market continues to evolve at a breakneck pace and CUs must be ready for it. So we asked Dave what's on the not-so-distant horizon when it comes to mobile services -- venturing beyond the big five, if you will, that keeps your members happy and loyal to your credit union.
The five biggest retail banks — recognized by the brand names U.S. Bank, Chase, Bank of America, Citi and Wells Fargo — control over 50 percent of total assets in the U.S. and are driving the mobile banking agenda. In a race to meet the mobile transaction needs of their customers, these banks have all conquered the most basic services that soon almost all banks will have—mobile banking, mobile bill pay, mobile deposit, ATM and branch locators and P2P payments. Now in phase two of mobile banking, these banks are in an arms race to further engage with customers’ mobile lifestyles, particularly by helping people save money when they shop.
Startup companies like Birchbox and Uber are winning the game of consumer marketing because of one single variable – they are marketing in the year that we actually live in. Unfortunately, too many financial marketers continue to promote messages in places where consumers are less likely to see it, hear it or feel it.
Toronto-Dominion Bank’s (TD) recent partnership with Moven is a material strategic move to help the bank’s customers advance their personal financial fitness. Moven, along with other nontraditional mobile banking providers like Simple and GoBank, are challenging the financial industry’s line of thinking of what a mobile banking app can be. These types of bank apps offer budgeting tools that can help customers prevent overspending and learn how to more effectively save money.
Nearly every financial institution (FI) has the Big 5 of Mobile Banking or is planning to have it in the next 12 months — Balance inquiry / funds transfer, Mobile bill pay, Mobile deposits, ATM / branch locator, P2P payments.
The top five largest banks in the country, which collectively own a majority of the checking account customers in the U.S. and represent the major competition for most community FIs, have had the Big 5 for quite some time. So getting the Big 5 is really just “table stakes” to play in the mobile banking game — a game which continues to occupy the hearts and minds of retail bankers as consumers are now more actively figuring mobile banking functionality into their decisions about where to bank.
When Wal-Mart Stores Inc. announced its partnership with Pasadena, Calif.-based Green Dot Corp. to launch the online and mobile-only banking alternative GoBank, the retailer was also placing its bet on where the future of banking is heading. But with all its other financial ventures up to this point still in place, like in-store branches and prepaid debit cards, Walmart is keeping a hand in all possible outcomes.
It is harder than ever to meet the increasing demands of the mobile banking consumer. As opposed to accepting mobile versions of online banking applications, the digital consumer wants the simplicity, contextuality, time savings and even entertainment value they receive from Amazon, Uber, Waze and their favorite retailer's mobile app.
Consumers’ relationships with banks are becoming dependent on how products and mobile banking fit in with their lifestyles. And if that relationship is going downhill, customers are much quicker to break up with their bank. That’s why leading banks are on the prowl to find the next great way to offer more than just the basics. They’re adding interesting features to mobile, introducing ways to help customers save money and offering more relevant benefits — all to create positive, lasting relationships with customers.
As more and more consumers are relying solely on their mobile devices, banks have to provide mobile products that their customers want and need. In this video, Dave DeFazio of StrategyCorps shares how some community banks are moving their mobile banking applications beyond the standard transactions.
StrategyCorps’ own consumer research shows there are three main types of retail checking account buyers:
- The Fee Averse Buyer – wants totally free checking or the cheapest account available
- The Interest Buyer – wants interest earned on their balances, regardless of the rate
- The Value Buyer – wants the most valuable account that includes more benefits than just the basics
Understanding these buyers provides the foundation for building your simple account lineup by matching the buyer type with these three accounts:
- No/low fee account
- Interest account
- Flat fee-based value account
What do real customers say about what they expect from their bank on Facebook or other social media sites?
We simply asked them.
The quotes you'll find throughout this article are from a series of “man on the street” style marketing research videos recorded by StrategyCorps in Nashville, Tennessee. The people who participated in this research were asked questions about how banking fits in with their lifestyles, one prominent topic being social media.
Ask bankers how they go about designing their retail checking products and most will answer with much more of a focus on the checking part than the retail part. Don’t get me wrong, the checking part is essential. The account has to be operationally secure, reliable and accurate in terms of supporting transactions and related information. However, customers have overwhelmingly shown they aren’t willing to pay for just checking. To be different, to generate much needed fee income and to really change the game of checking, banks must focus more on the retail part of retail checking. Here’s why.
In summary, about 40 percent of consumer checking accounts are so “shallow” that they don’t generate enough income (net interest income and fees) to cover the estimated annual costs to maintain and service the account. Plus, this 40 percent only contributes 2.7 percent of all checking-related revenue and 1.4 percent of total relationship dollars.
I’ve done hundreds of mystery shops over the years, at branches all over the country. While I find that the branch employees I meet are generally friendly and professional, I’m frustrated in the small number of truly great mystery shop results that I get to report. Banks spend big marketing dollars to get new customers in the door, but what happens when they get there sometimes becomes an afterthought.
Maintaining a customer’s checking account costs your financial institution money. The American Bankers Association estimates the annual cost to a bank to maintain a checking account is between $250 and $400 per year. For community financial institutions with less than $5 billion in assets, the average according to other researchers is closer to $250 to $300.