Your Mobile Catalyst

In my last two posts, I’ve written about the applications of mobile technologies & strategies (“Disruptive? Mobile? Regulated? Check, check, check“) and new opportunities for financial institutions to use mobile banking as a growth strategy (“In search of the next great customer experience.”) Today, I take a look at how a few community banks have learned from their bigger counterparts after explaining why board members need to become better educated to the mobile technologies available to their institutions.

mobile-banking-3.jpgYou’d be hard pressed to find someone in our business that doesn’t know the name Deloitte. In the U.S. alone, the international accounting and consulting firm (and its subsidiaries) employs more than 45,000 professionals and counts a number of major financial institutions as clients.  At the board level, a firm like this enjoys a brand recognition normally reserved for the IBMs and Skadden, Arps of the world. So a Deloitte-authored white paper on “Priorities for Tech-Savvy Directors as they oversee IT Risk and Strategy” caught my eye this weekend and sparked today’s post.

If you’re a regular reader, you’ll know I spend most weeks on the road meeting with bank CEOs, chairmen and outside directors and/or service providers and product vendors that support the industry. From investment bankers to bank analysts, attorneys to community bankers, quite a few people have recently asked for my opinion on the board’s role in technology decisions. Let me borrow from Deloitte’s piece in sharing my response:

Just as the growing complexity of accounting and disclosure issues made financial literacy a mandatory requirement for members of audit committees, the growing complexity and pervasiveness of (information technology) is increasingly making IT literacy an essential competency for directors… 

As the organization’s use of IT expands, the board’s responsibility for IT oversight grows. Boards need to ensure that their organizations maximize the benefits of IT, both through the alignment of IT with business strategies and through the ability of IT to help identify and mitigate risks to the organization (including those associated with IT itself).

So what does this mean for those boards looking to go mobile?  Let’s start with the basics: Boards have a responsibility for understanding, guiding and governing the overall strategic direction of their banks.  Accordingly, if mobile banking hasn’t become a part of your growth plans, you need to understand how providing such access to personal accounts and your institution as a whole supports your overall business strategy.

Fortunately, you don’t have to be big to be mobile.  Heck, you don’t have to be a “young” or entrepreneurial bank to offer it. Case-in-point: More than 100-year-old community banks have made their way into the space. Chesapeake Bank is a few hours down the road from me in D.C., and offers its customers convenient and secure ways to review transaction histories, check account balances, transfer funds between accounts and pay bills. So, too, does Fidelity Deposit & Discount Bank in northeastern Pennsylvania, which recently introduced ZashPay, a product offered by Fiserv, which enables customers to send and receive money from anywhere at any time using only an email address or mobile telephone number.

Those are just two examples of smaller banks that have jumped on the mobile bandwagon. A recent report by Accenture highlights the promise available to all:

Banks generating the highest returns on their mobile banking investments achieved ROI by emphasizing customer convenience, providing rich exchanges of information between bank and customer and accurately measuring how customers use their mobile phones to bank…

As I’ve written before (and Accenture backs up), the mobile banking channel offers an opportunity for banks to create a meaningful dialogue with their customers, deepen loyalty and broaden the services to which their customers can subscribe.  In this way, mobile banking is a competitive differentiator, as it provides timely, accurate information to the bank— critical to business strategy, and a true responsibility of the board.

Stop me if you’ve heard this one…

…an IT salesman walks into a bank.

Now, if such a thought sends you running for the nearest exit, you might pause and consider that a number of institutions — both big and small — are implementing new technology strategies to lower costs for retaining clients, improve operating efficiencies and differentiate their brands and customer offerings.

That said, I know for many executives, talking tech can be a foreign, four-letter, budget-busting concept. So let me help you based on personal experience and professional interests.

I’ll admit that my days of devouring for sports updates on my Boston teams has given way to similar searches for insights on the financial industry. And so as we continue to invest in Bank Director’s future, I’m taking a long, hard look at the technology companies that support the community. Splitting time between California and the east coast last week, I found myself reading a number of white papers, reports and blogs about the risks — and potential rewards — of new technologies in our community: here are two that I thought bank executives shouldn’t overlook. One comes from our friends at American Banker (FinTech100); the other, from global IT consultant Accenture (vis-a-vis their financial services publication).

As someone who has evaluated a number of web-based tools designed to better predict behavior, I’m bullish on the adoption of new technologies to maximize a customer’s experience. If you’re interested to see who’s who in the technology industry as it applies to financial institutions, the FinTech 100 list is a good place to start. So too will a new offering coming from Bank Director later this month — BankBusiness. Why the drive to identify potential vendors? Simple: Accenture opines that the financial crisis and subsequent economic reforms have made profitable but risky sub-prime segments less attractive to many institutions, [so] the future of banks rests increasingly on sustainable long-term relationships with high-quality customers. Intuitive? Perhaps. But the consultancy identified the following emerging customer behaviors that should make all of us sit up and take notice:


According to the firm’s research, your customers “have gone through several major changes in recent years, from diminished loyalty to—and trust in financial institutions—to heightened expectations for seamless multichannel customer service and simple, transparent products… With loyalty to banks at all-time lows, the good news is that the time is right for those with superior customer experience and cost-to-serve management to win new business.”

So what emerging technologies might catapult your bank’s business? In isolation, I’d be hard pressed to answer. As part of an institution’s systematic, data-driven approach? The foundation for future posts…