Future-Driven Mobility

Don't fear the future of mobile banking

Bill Murray made progress by taking baby steps in the movie, "What About Bob?" But if banks are going to make progress in the future, baby steps are not going to be enough.

According to Jennifer Clark, former vice president and director of ecommerce at Cambridge (Mass.) Savings Bank and now an e-consultant for retail banks (www. s implye strategy, com), "Social communication and mobile banking are shaping today's world. These are paradigm shifts in the way people communicate today and the way banking will be conducted tomorrow."

Washington Trust Bank, a $4 billion-asset bank in Spokane, Wash., recently took its giant step by implementing mFoundry's mobile banking solution. Mobile customers now have the ability to check balances, pay bills, make transfers and find branch and ATM locations. In addition, customers using a device with a mobile web browser can view the bank's enhanced mobile website.

"The new service is a nice complement to our existing suite of online delivery products," said Amber Albertini, vice president, product manager. "It helps to round out our already robust product lines and continues our commitment to customer experience by allowing them to bank with us in a way that meets their needs and allows them to take control of their finances."

Washington Trust Bank understands that even though mobile banking remains comparatively small compared to brick-and-mortar and online banking, the future portends an expansive segment of the population adopting mobile banking. A recent survey by Intuit Financial Services, for example, found 20 percent of banking customers using mobile banking solutions to manage their finances, and the percentage is increasing at a rapid pace.

"Mobile banking is evolving from simply being a source of account details, to something richer and more transaction-driven," said Carlo Cardilli, senior vice president, sales and business development, at mFoundry. "Although there is ROI from mobile banking in terms of call center deflection and increased debit card spend, there are new features like mobile deposit, peer-to-peer money movement, card loyalty, fraud protection, payments, etc., that are driving gains on both top and bottom lines for financial institutions."

Albertini identified three primary objectives in the bank's mobile banking initiative: to deploy all three mobile banking offerings: text banking, mobile web and downloadable apps; to work with a partner whose approach to innovation matched the bank's strategic plan for future development in the mobile banking channel; and to get the new mobile offering to market quickly and without a large number of project hours involving internal resources. In fact, the process of determining delivery strategy and prioritizing deliverables took just 30 days. The final decision was based on two primary objectives: to meet customer demand, and to remain competitive with the large financial institutions already delivering mobile banking solutions.

Partnering

One of the objectives - working with an innovative partner - was achieved through the selection of mFoundry's software-as-a-service (or SaaS) offering, which allowed the bank to implement the mobile banking solution without any significant changes. mFoundry is among the companies helping community banks and credit unions introduce mobile banking without significant infrastructure changes and capital expenditures.

"mFoundry's mobile banking platform has been successfully deployed for financial institutions of all sizes," said Cardilli. "Delivered as a configurable, hosted solution, the platform can be deployed quickly and then dynamically updated as new features and functions are added as the market matures." The company can integrate its mobile banking platform directly into a bank's or credit union's core system, or deliver it via connections through multiple online banking systems, ATM networks and bank-created web services.

"We have been able to incorporate the product development and strategy, as well as the technical support, into our existing internal infrastructure for customer online delivery channels," said Albertini.

Although the bank doesn't expect to generate fee income directly from mobile banking, it does expect to realize indirect income by attracting new customers, increasing its retention rates on existing customers and increasing transactions in the bank's payment channels (e.g., debit and credit cards).

Mobile Wallets

The ability to receive updated features is one of most compelling features of SaaS solutions, especially as nextgeneration smartphones become fully functional mobile wallets: portable devices capable of making purchases, sending e-payments, conducting person-to-person transactions, checking account balances, transferring money, receiving financial alerts, depositing checks remotely, and, for businesses, sending e-invoices.

mFoundry is one of the only mobile banking providers in the United States with a deployed, fullproduction mobile payment solution in market. And the solution can be deployed within its SaaS mobile banking platform. This means that when mobile payments finally hit the United States, Washington Trust Bank will be able to implement the service without a major operational or technological impact.

"Mobile banking is a channel with enormous potential and with ever-increasing demand among customers and potential customers in every market," said Albertini. "Our approach is to look at our mobile banking channel as strategically as we approach the rest of our commercial and retail banking initiatives."

If you are still taking baby steps, perhaps you need expand your step as you expand your vision of what lies ahead. SaaS mobile banking solutions are available now for banks from $100 billion to $50 million in assets. And three years is not a long time.

[Sidebar]

Washington Trust Bank recently took a giant step by implementing mobile banking.

[Author Affiliation]

Michael Scheibach * Executive Editor * mscheibach@banknews.com