Making the Business Case for Oxygen – American Banker Mobile Banking Summit
My black suit and I just escaped from the 110º Las Vegas heat where we attended Source Media’s American Banker / Bank Technology News Mobile Banking and Emerging Applications Summit along with over 300 others from the mobile banking and mobile payments industry.
I was honored to lead a two-hour pre-conference workshop where we walked through relevant mobile banking ecosystem stats, building mobile business cases, and highlights of integration gotchas. The business case portion sparked particularly vigorous and interesting discussion.
Coincidentally, the next day Bob Hedges from Mercatus proclaimed provocatively:
“Making the business case for mobile banking is like making the business case for oxygen.”
Bob was making the point (after showing a ton of data for building mobile business cases) that it’s not up for debate whether mobile banking will be important in North America. Mobile Banking is important and it’s here to stay. Mobile banking is table stakes and organizations without mobile banking aren’t at the table. I doubt anyone at the conference disagreed, considering the overwhelming data supporting this that we saw from so many sources. Hundreds, if not thousands, of banks and credit unions are offering mobile banking — and it’s working.
With so many banks already providing some form of mobile banking, the general conversation not surprisingly contained many themes around what’s next for mobile banking.
- US Bank announced a number of aggressive initiatives including two separate Person-to-Person (P2P) payment offerings and a white label personal shopping and couponing application for retailers.
- Wells Fargo shared their success in offering mobile banking for commercial treasury services customers. Interestingly, Wells’ Megan Minich shared that the iPhone accounts for 30% of mobile access to their treasury services mobile app, with the majority of access (50%) coming from BlackBerrys.
- USAA also walked us through their latest innovations and hinted at an upcoming P2P Payment offering. USAA’s Jeff Dennes also noted that roughly 20% of their mobile users identify mobile as their primary channel for interacting with USAA with Android already accounting for 13% of their mobile volume.
Hands-down, I think P2P was the overwhelming theme of the conference. There was a sense of momentum and inevitability around P2P discussions that didn’t exist in 2009 or even before the Great Recession. To be sure, there’s great uncertainty as to how P2P will work best and what exactly will be the compelling factor for user adoption. However, banker after banker discussed on and off the record their plans for implementing P2P in the near future.
Notably, Wences Casares of Bling Nation bluntly said what needed to be said about the payments industry:
We’ve gotten used to high levels of fraud due to crappy [payment] networks. We put people’s full names on the cards, with account numbers, and the CVV. We put it all on the magstripe again which is easy to read. And it all gets passed along a chain of companies from the retailer, to the payment gateway to the acquiring bank and so on. We hand our card with all this information to the merchant and say, “Here you go Mr. Merchant. Here’s all my information. Do what you want with it.”
Raucous applause followed.
There’s a momentum in the industry to innovate and find ways to make mobile banking more transactional, less dependent upon cash and checks, and to reduce fraud. Venture capital is flowing into startup payments companies. Bankers are sifting through the options trying to figure out an approach that works. NFC and contactless payments are also on the horizon but are perceived (I think) to be less immediate than P2P payments (2012 or 2013 rather than 2011).
The banks that survived the Great Recession are preparing to innovate and compete. Mobile banking and mobile payments are their weapons.