Recently, Google generated a fair amount of buzz with its Google Wallet app. Have you seen it? It allows a consumer to load debit or credit card information into their Android-powered mobile device and pay on the go with a simple tap at "at hundreds of thousands of MasterCard PayPass merchant locations." Clever, right? It should be, considering it was "designed for an open commerce ecosystem." So is this a competitor to your bank —or a simple reinforcement that for those of you not in the mobile field, it really is time to sit up and take notice? How might your board start down this path? Glad you asked...
When I got my start with Bank Director in 1999, I innocently asked when a decision made it to the board's level. The answer came in the form of a drawing: a three-legged stool to be exact. Twelve years ago, our CEO depicted each leg with a word: Strategic, expensive, and risky.
Well, that picture remains firmly planted in my mind. For a while, the marriage of all three applied nicely to issues like mergers and acquisitions, directors and officers liability and executive compensation. Since coming back in September, I've started to hear the same standards applied in terms of mobile banking strategy. Let me explain.
In April, at our annual Chairman/CEO peer exchange conference, a handful of CEOs from public banks with more than $1 billion in assets talked with me about growing their business in a recovering economy. With a beer in hand, I consider those conversations off-the-record. Let me just say, given our growing love affairs with mobile devices of all shapes, sizes and underlying technologies, the fact we were talking about their desire to provide a mobile banking experience to help transform the way people manage their finances through their institutions was not surprising. In fact, one CEO offered that, with PNC "just across the street," a strategy that challenged the status quo would be of interest to him, his chairman and his board.
With these CEOs thoughts rattling around in my mind, I thought to reach out to a few folks in the business to get their take. While most shared the standard stuff (you can attract new market segments! Increase customer satisfaction and loyalty!! Generate new revenue!!!), let me pass along a few tidbits c/o Intuit Financial Services' John Flora. John is the Mobile Solutions Group Product Manager—and counts banks with tens of billions in assets as customers. While we talked about a few roll-out opportunities, I think he has it right in terms of the questions that a CEO needs to ask in terms of mobile banking (no particular order):
- How can we best grow our business using mobile as a complementary (not restrictive) asset to what we offer now?
- How quickly can we make this happen?
- What does the initial integration cost look like?
- How does mobile fit into our core banking strategy?
We laughed because 12 to 18 months ago, thoughts about going mobile centered on cost reductions, retention of customers, building impressions, and more regular engagement. He said while those are still on the table, the last six months have seen most institutions realize that they cannot afford NOT to have a mobile strategy.
John also made the very good point that mobile banking requires the bank to back it up with marketing awareness. (This is where some banks fall down). In his experience, adoption rates are very high in the first month; but to sustain that momentum, leadership needs its employees to promote mobile apps and opportunities to better connect with clients on-the-go. So while putting a consistent marketing strategy into play on day one isn't the job of the board, setting the strategy and expectations certainly is consistent with what I'm hearing today.