By John Ginovsky

Bankers would serve themselves and—importantly—their customers if, right off the bat, they charged for offering a mobile banking channel instead of just offering it for free, says Michael McEvoy, managing director, ath Power Consulting.

He makes the point in an exclusive interview, in which he expands on results of a study he did and which was in the ABA Banking Journal Tech Topics e-letter of April 11. In an online survey, ath asked 1,527 mobile banking users about their current banking behaviors, and audited 350 mobile banking users for detailed feedback. One of the results highlighted last week was that customers are willing to pay for mobile banking.

“We asked them if they would be willing to pay for today’s mobile banking offering. We offered different options: $1-2, $3-5, $9-11. Above that, nobody indicated they’d pay,” he says. But at least 1% of those surveyed said they’d pay $11 a month. At the $1-2 level, about one in seven said they’d be willing to pay.

“There are two points that come from that. One is that, banks have a potential right now to charge maybe $1 a month or $2 a month for this, even for today’s basic offering, without really offending an awful lot of people,” McEvoy says. “The second point is, if people are willing to pay for today’s very basic offering, a lot more people can be expected to pay, be willing to pay, and be very happy to pay, as the capabilities improve…But if you try to go from zero to any amount, it’s much more challenging.”

On the flip side, however, the ath Power study results indicate that mobile banking capabilities could be much improved. For one thing, additional features would help, such as person-to-person payments and rewards programs. “As they do things that add value to the customer I think we can expect more people would be willing to pay for it,” McEvoy says.

However, even the basics of what’s typically offered now are not where they should be in terms of tech support, customization, and ease of use.

“In general terms, people were finding they were not getting a lot of technical support when they used mobile banking,” McEvoy says. “If they had a problem there was no easy way to deal with it and nobody to guide them through the process of using mobile banking, understanding what the capabilities are.”

Other things depend on improvements by mobile banking vendors. “[One] thing that’s really lacking is the ability for the end user to have input to what they are looking at on the screen,” he says.

Also, the study found that for the most common transactions, the number of clicks a user is required to do varies considerably.

“That’s something that vendors can improve upon as well, identifying what are the most important things people use mobile banking for and then minimizing the number of clicks to do that,” McEvoy says. Much the same process has already occurred with online banking websites.

One straightforward thing that banks can do to boost adoption of this new channel is to simply tell people about it, and not assume customers already know about it.

“Only one in ten customers who initiated mobile banking did so because the bank suggested it. All the others began using it because of some other reason, such as hearing about it from a friend or just looking for it on their own,” he says. “On that basis we say that banks have not been great at promoting it.”

Not only not promoting it, but not describing what’s available through it. Remote deposit capture, for example, was found to be the most desirable function that customers, both retail and commercial, said they want.

“A good number of people don’t even know if their bank would allow them to do remote deposit capture. On the one hand you have consumers saying `I’d like to be able to upload the image of a check and deposit it and not have to go to the ATM or the branch.’ On the other hand they don’t even know if they could do it already with their mobile banking app,” he says. [Anecdotally we’ve heard people complain about the low dollar-value cap some banks put on mobile RDC.]

In sum, McEvoy says, mobile banking is on the brink of taking off, but only if its functionality keeps improving and if it is promoted properly.

“What is surprising is the survey indicates people are happy with what they have now, but the study finds that part of the current satisfaction is because it’s so new and people don’t have great expectations as yet,” McEvoy says. “But those expectations can be expected to grow over time. Therefore, I think banks and vendors will need to improve what they do.”

 

 

About the Author John Ginovsky is contributing editor of ABA Banking Journal and editor of the publication’s TechTopics e-newsletter. For more than two decades he has written about the commercial banking industry. In particular, he’s specialized in the technological side of banking and how it relates to the actual business of banking. He previously was senior editor for Community Banker magazine (which merged with ABA Banking Journal) and was a staff writer for ABA’s Bankers News. You can email him at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

 

[This article was posted on April 17, 2012, on the website of ABA Banking Journal, www.ababj.com.]

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