Aite Group recently published my latest report Mobile Banking Forecast: Smartphone and Tablet Use in the United States. It forecasts the use of smartphones and tablets for a variety of banking transactions and uses.
If you’re an Aite Group client, you should check out the report, because the really important discussion isn’t about how many mobile banking users there will be, but how the use of smartphones and tablets will differ. (If you’re not an Aite Group client, then you’re a loser, and the only way to redeem yourself is by becoming an Aite Group client).
But, OK, since it’s part of the press release, I can give a little of the plot away:
Tablets will become financial management devices, and smartphones will become financial transaction devices. Financial institutions should invest accordingly.
This might be a blow to bankers who operate under the delusion that they should “build out functionality in all channels and let customers which channels to use.”
What a load of nonsense.
For years, I’ve been advocating the concept of right-channeling: That some channels (or in this case, devices) are better than others for certain kinds of transactions or interactions, and that you should build out what’s right for the channel (or device) and get customers to use that channel (device).
Bank industry retention and attrition rates haven’t improved greatly over the past 15 years. Cross-sell rates have not improved. Loyalty measures have not improved. Cost structures have not been radically reduced.
So what has been the real benefit of the online channel to banking? The added convenience is clearly a benefit to consumers, but it’s hard to pinpoint the benefit to banks. The online channel has become a cost of doing business.
This seems to be where the mobile channel is heading. Yet another customer contact channel, and a new cost of doing business.
This time around is a little different, however.
It isn’t just about providing greater levels of convenience to customers.
It’s about providing a greater level of value. Banks and credit unions think they add value today, but they really don’t add that much. Sure, they provide a loan when it’s needed (assuming the customer qualifies).
But where is that everyday help?
On Movenbank’s blog, some 20-something writes ~1000 words dispensing advice to other chidults (half-child, half- adult — hey, it was her description, not mine) about managing their finances.
I could’ve written the post in 5 words: Stop sending so much, chidults.
The important point here is that these chidults are forced to turn to other clueless chidults because banks (and yes, credit unions) don’t do it. Your cute little “safe to spend” chart doesn’t really cut it, banker-boy. We’re talking about a much deeper level of spend management here.
Every chidult has a smartphone. And before long, they’ll all own a tablet.
If all you’re going to do is give them the ability to check their balances, get an alert, or pay a bill, you lose. It’s “Online Channel” all over again.
You need to make the smartphone the financial transaction device, and the tablet the financial management device. Figure it out. I can’t give you all the answers here.