Bankers – Wake Up! It’s the 21st Century…

James Gardner did a great post on his blog today that got me thinking. Why is it so hard to get Mobile banking and social media on the minds of the top bankers today?

The iPad has sold over 1 million units in just over 1 month since its release, but this pales in comparison to the iPhone which has exceeded 100 million total units, with sales globally expected to reach 58 million this year alone. Considering that the iPhone has only recently been officially launched in Japan and China, we can expect the future of iPhone sales to be extremely robust. But this is only part of the smartphone revolution. Google’s Android operating system has been a huge success too. In Q1 of 2010 in the US market, Android-based phones actually outsold iPhones with 28 percent of the marketshare of smartphones going to Google’s platform. Blackberry still commands 36 percent of the US market due to its strong enterprise support.

Needless to say, smartphone sales globally are in bull market that Wall Street could only dream about.

So why is it that less than 2% of US banks have a dedicated mobile app or mini-browser based for banking for any of these platforms. That wasn’t a typo –less than 3% of US Banks currently have deployed a mobile banking app. Believe it or not! As the saying goes…

Bank of America has over 4 million users of their mobile banking platform available on iPhone, Blackberry and Android. They saw a 300 per cent increase in mobile banking usage from 2007 to 2008, and just in April of 2009 they had 2.2 million users – that has already ballooned to over 4 million. Given the slow start by most banks in the US on mobile, BofA claims they have 35 percent of all US mobile banking users. They’ve had more than 150,000 new deposit accounts opened just because of their support for mobile.

The list of major banks globally who still have no mobile support is beyond shocking. HSBC leads the pack of laggards, with no App support globally, nor a vocal strategy for when they’ll launch their mobile banking platforms. Capital One, BB&T follow HSBC’s lead in thinking mobile is perhaps much ado about nothing. For many of the US leading banks such as Suntrust, US Bank, and Chase, they only just launched their iPhone apps in the last quarter of 2009. So they weren’t exactly setting the pace either.

Canadian banks were even slower. Royal Bank of Canada, TD Bank, Bank of Montreal and Nova Scotia Bank only launched their iPhone apps in Q1 or Q2 of this year. CIBC was the first bank to come to the party in Canada on the 2nd of February of this year. I fear that it really was a case of competitive pressure here where no one felt they had to move until the first bank had, and then it was a mad scramble to catch up.

So why the delay?

Is it Cost?

It shouldn’t be. The cost of developing an iPhone app from a credible developer is somewhere between US$12-80k. Given the take up of mobile app phones and smartphones this is a very small expenditure to prevent disenfranchising customers. Given BofA generated more than 150,000 new customers from their mobile banking forey, ROI is not at all hard to justify.

Is it technical/platform integration?

Given that every bank I know had to create a messaging layer to handle Internet Banking transactions and enquiries, and that this same messaging architecture can be used for m-banking app integration…no. This is not it.

Is it lack of customer support?

Nope, not this either. Go to FirstDirect’s Interaction “Talking Point” portal. In questions relating to the bank’s performance more than 10% of responses in some instances related to the lack of iPhone App. Yet First Direct hasn’t announced when their App will be released as yet.

Is it security?

Due to the mobile SIM card features available within a mobile phone, security is actually better than through standard internet banking, and two-factor authentication and other such methods can still be applied.

So, what is it then?

Any retail banking organization that doesn’t yet have an iPhone app, a specialist m-portal for mini-browsers and support for Android and Blackberry platforms, is demonstrating they are not prepared for the customer of today.

The same thing is happening with social media. Most banks still insist on banning the use of Facebook, Twitter, blogs and YouTube within the confines of the bank.

It comes down to a simple quote from Einstein, “Problems cannot be solved by the same level of thinking that created them.” We can’t expect traditional managers of banks who have grown up on a staple of branch banking to embrace customer innovation in a multi-channel environment.

It’s time to inject new blood into management at a senior level. Banks need to start taking some risks – not prop trading. They need to start injecting new thinking into the boardroom from non-bankers, from Y-Gen and from customer experience advocates. If not, there will simply be left the haves and have nots.

Banks that have profitable multi-channel customer relationships, and banks that don’t.

UPDATE – Response from @firstdirect

When I posted on my blog this morning US/UK time about mobile banking and the apparent reluctance of some banks to deploy iPhone Apps, etc I used the example of HSBC and First Direct’s seeming tardiness on the App side. I have got used to the fact that most of the ‘too big to fail’ bankers are immune to suggestions on improving customer experience through social media these days, so I was pleasantly surprised to get a response from First Direct’s team within just a couple of hours of my post.

This is the social media conversation working as intended and it is evidence of the fact that at least some within the retail banking fraternity are learning to listen. Mind you, First Direct’s big brother – HSBC – is yet to respond to numerous posts that I’ve made about their recent performance from a customer perspective.

Here’s what First Direct had to say:

“We can confirm that, whilst customers can’t download a first direct App from the Apple store, we do have a version of our internet banking site which can be more easily viewed on the iPhone. This site www.firstdirect.com/iphone has been set up in such a way that, if you have an iPhone, you can add the page to your homepage and then quickly log in to your internet
banking, visit firstdirect.com or just touch the screen to give us a call on the customer number.

We do have plans to launch several iPhone Apps for our customers over the coming months ranging from an App for our customer recommendation site to our dedicated Banking App. We haven’t rushed into launching these Apps as we want to make sure we get it right first time rather than pushing something out that isn’t really ready.”
@firstdirect, via Twitter

This is delightful stuff. Although I don’t necessarily agree with the fact that @firstdirect hasn’t got at least one iPhone app out today, they do have a workaround and are committed to solving this problem. They are aware of the problem and trying to address it in the short-term, and more permanently.

To be fair to FirstDirect, like the rest of the HSBC group, they are in the midst of the big OneHSBC platform roll-out. Given that any iPhone App is going to be needed to integrate with this new architecture, I can understand the internal justification for why the delay has occurred. However, that’s not an excuse. What HSBC and FirstDirect should have made the decision to do last year is launch a “version 1” App until OneH was fully live. I think in this case the technical integration challenge and “pushing out something that isn’t really ready” has hurt them.

Customers don’t see a bank that is taking their time to get it right with their iPhone App. They just see a bank who doesn’t have an iPhone app.

Well, to be fair to FirstDirect – they have their social media listening post working very well. Impressive! If this is indicative of their responsiveness to customer issues, then I have no doubt they’ll get there.

James Gardner did a great post on his blog today that got me thinking. Why is it so hard to get Mobile banking and social media on the minds of the top bankers today?

The iPad has sold over 1 million units in just over 1 month since its release, but this pales in comparison to the iPhone which has exceeded 100 million total units, with sales globally expected to reach 58 million this year alone. Considering that the iPhone has only recently been officially launched in Japan and China, we can expect the future of iPhone sales to be extremely robust. But this is only part of the smartphone revolution. Google’s Android operating system has been a huge success too. In Q1 of 2010 in the US market, Android-based phones actually outsold iPhones with 28 percent of the marketshare of smartphones going to Google’s platform. Blackberry still commands 36 percent of the US market due to its strong enterprise support.

Needless to say, smartphone sales globally are in bull market that Wall Street could only dream about.

So why is it that less than 2% of US banks have a dedicated mobile app or mini-browser based for banking for any of these platforms. That wasn’t a typo –less than 3% of US Banks currently have deployed a mobile banking app. Believe it or not! As the saying goes…

Bank of America has over 4 million users of their mobile banking platform available on iPhone, Blackberry and Android. They saw a 300 per cent increase in mobile banking usage from 2007 to 2008, and just in April of 2009 they had 2.2 million users – that has already ballooned to over 4 million. Given the slow start by most banks in the US on mobile, BofA claims they have 35 percent of all US mobile banking users. They’ve had more than 150,000 new deposit accounts opened just because of their support for mobile.

The list of major banks globally who still have no mobile support is beyond shocking. HSBC leads the pack of laggards, with no App support globally, nor a vocal strategy for when they’ll launch their mobile banking platforms. Capital One, BB&T follow HSBC’s lead in thinking mobile is perhaps much ado about nothing. For many of the US leading banks such as Suntrust, US Bank, and Chase, they only just launched their iPhone apps in the last quarter of 2009. So they weren’t exactly setting the pace either.

Canadian banks were even slower. Royal Bank of Canada, TD Bank, Bank of Montreal and Nova Scotia Bank only launched their iPhone apps in Q1 or Q2 of this year. CIBC was the first bank to come to the party in Canada on the 2nd of February of this year. I fear that it really was a case of competitive pressure here where no one felt they had to move until the first bank had, and then it was a mad scramble to catch up.

So why the delay?

Is it Cost?

It shouldn’t be. The cost of developing an iPhone app from a credible developer is somewhere between US$12-80k. Given the take up of mobile app phones and smartphones this is a very small expenditure to prevent disenfranchising customers. Given BofA generated more than 150,000 new customers from their mobile banking forey, ROI is not at all hard to justify.

Is it technical/platform integration?

Given that every bank I know had to create a messaging layer to handle Internet Banking transactions and enquiries, and that this same messaging architecture can be used for m-banking app integration…no. This is not it.

Is it lack of customer support?

Nope, not this either. Go to FirstDirect’s Interaction “Talking Point” portal. In questions relating to the bank’s performance more than 10% of responses in some instances related to the lack of iPhone App. Yet First Direct hasn’t announced when their App will be released as yet.

Is it security?

Due to the mobile SIM card features available within a mobile phone, security is actually better than through standard internet banking, and two-factor authentication and other such methods can still be applied.

So, what is it then?

Any retail banking organization that doesn’t yet have an iPhone app, a specialist m-portal for mini-browsers and support for Android and Blackberry platforms, is demonstrating they are not prepared for the customer of today.

The same thing is happening with social media. Most banks still insist on banning the use of Facebook, Twitter, blogs and YouTube within the confines of the bank.

It comes down to a simple quote from Einstein, “Problems cannot be solved by the same level of thinking that created them.” We can’t expect traditional managers of banks who have grown up on a staple of branch banking to embrace customer innovation in a multi-channel environment.

It’s time to inject new blood into management at a senior level. Banks need to start taking some risks – not prop trading. They need to start injecting new thinking into the boardroom from non-bankers, from Y-Gen and from customer experience advocates. If not, there will simply be left the haves and have nots.

Banks that have profitable multi-channel customer relationships, and banks that don’t.

UPDATE – Response from @firstdirect

When I posted on my blog this morning US/UK time about mobile banking and the apparent reluctance of some banks to deploy iPhone Apps, etc I used the example of HSBC and First Direct’s seeming tardiness on the App side. I have got used to the fact that most of the ‘too big to fail’ bankers are immune to suggestions on improving customer experience through social media these days, so I was pleasantly surprised to get a response from First Direct’s team within just a couple of hours of my post.

This is the social media conversation working as intended and it is evidence of the fact that at least some within the retail banking fraternity are learning to listen. Mind you, First Direct’s big brother – HSBC – is yet to respond to numerous posts that I’ve made about their recent performance from a customer perspective.

Here’s what First Direct had to say:

“We can confirm that, whilst customers can’t download a first direct App from the Apple store, we do have a version of our internet banking site which can be more easily viewed on the iPhone. This site www.firstdirect.com/iphone has been set up in such a way that, if you have an iPhone, you can add the page to your homepage and then quickly log in to your internet
banking, visit firstdirect.com or just touch the screen to give us a call on the customer number.

We do have plans to launch several iPhone Apps for our customers over the coming months ranging from an App for our customer recommendation site to our dedicated Banking App. We haven’t rushed into launching these Apps as we want to make sure we get it right first time rather than pushing something out that isn’t really ready.”
@firstdirect, via Twitter

This is delightful stuff. Although I don’t necessarily agree with the fact that @firstdirect hasn’t got at least one iPhone app out today, they do have a workaround and are committed to solving this problem. They are aware of the problem and trying to address it in the short-term, and more permanently.

To be fair to FirstDirect, like the rest of the HSBC group, they are in the midst of the big OneHSBC platform roll-out. Given that any iPhone App is going to be needed to integrate with this new architecture, I can understand the internal justification for why the delay has occurred. However, that’s not an excuse. What HSBC and FirstDirect should have made the decision to do last year is launch a “version 1” App until OneH was fully live. I think in this case the technical integration challenge and “pushing out something that isn’t really ready” has hurt them.

Customers don’t see a bank that is taking their time to get it right with their iPhone App. They just see a bank who doesn’t have an iPhone app.

Well, to be fair to FirstDirect – they have their social media listening post working very well. Impressive! If this is indicative of their responsiveness to customer issues, then I have no doubt they’ll get there.