Mobile Banking Requires a Long-Term Strategy. Canada is ready.

The call for strategic mobile banking is increasing and two recent articles are absolute must-reads.

First, Mobile Financial nicely sums up the challenges of mobile banking. Mobile Banking is not a simple add-on to an existing product. Mobile provides new ways to connect with your customer, strengthen loyalty, and deliver better services at a lower cost.

Mobile poses significant risks and technical challenges. Making a prudent decision on mobile banking requires three key “legs of a stool” a) deep collaboration between the business executives who know the long term goals for the organization, and b) the technology team who knows the intricacies of the current environment, and c) deep mobile expertise, which is often missing from most organizations.

Success requires all three legs of the stool and moving forward without all three almost certainly will result in failure (although some banks have set the bar extremely low so they can claim success, regardless). Mobile banking efforts now should be a base to build upon in the future. Doing it wrong now and having to start over puts you behind your competitors who did it right.

Secondly, Jose Colucci writes a manifesto (or offers a 12 step program) on why Canadian banks should offer mobile banking now. The Canadian market is ready. Canada is the land of the RIM and increasingly the iPhone. Canada has the technology, the infrastructure, the resources, and the demand for mobile banking to completely explode (in a good way) and be an example of success for the developed world.

I predict that when the first bank makes a bold move, the entire industry will follow. Canadian mobile banking will happen in a breathtaking, large rush.

In fact, in doing some Search Engine Optimization last week, I discovered one of the most searched terms related to mobile banking in Canada is “TD Mobile Banking.” Like most other Canadian banks, TD has a mobile web site that is keeping the proverbial light on for mobile. But like most WAP interfaces,  the TD site has some usability challenges which are almost certainly preventing widespread adoption.

And the point is that despite the usability challenges and lack of promotion, there is considerable demand for the product.

Canadian customers like Jose are clamoring for mobile banking.

C’mon CIBC, BMO, Desjardins, Laurentian, National, TD, and RBC. Let’s have it!

In the last week or so two studies have come out saying, among other things, that organizations:

• a) Need a mobile strategy now
• b) Lack key resources to develop a mobile strategy
• c) Must be very careful

Today, IDC Financial Insights released a report saying that as the recovery continues, banks will face increasing pressure to offer mobile services. Furthermore, banks need to proceed very carefully and “take a more strategic look at mobile banking rather than view it as simply an extension of online banking and bill payment.”

Similarly, a UK survey found that in 86% of organizations, IT groups were in charge of developing a mobile strategy. However, nearly half said they lacked necessary skills to develop a successful mobile strategy.

This is why I’m in business. I have seen this first hand in hundreds of organizations. Even if a successful mobile strategy was as simple as picking a product (which it definitely isn’t), the ever changing combination of technologies and vendors makes it extremely difficult alone to come up with a plan that is reasonably likely to succeed.

I have seen what hundreds of organizations have done with mobile. Most bankers faced with making a decision are stuck with what vendors tell them and the dribbles of vague information on the Internet.

I’m here to help increase the odds of success and make your mobile strategy more than just a product selection. Every organization has a different culture, faces different competition, and has different integration and security needs. Bankers need a strategy that helps them differentiate, continue serving their customers according to their existing culture, and supports the continual search for revenue opportunities.

I went home this weekend for my high school reunion in Central Kentucky. It was a blast. I think all the predictable sitcom reunion situations — both drama and comedy — occurred, but this time in real life.

As would be expected, everyone showed pictures of their children. However, I don’t recall a single person actually pulling a paper picture from their purse or wallet. Everyone showed pictures using their phone. Of course lots of people also took pictures using their phone.

As in high school, we all have ended up in different socio-economic levels. Some of us went to college, some of us didn’t. Some of us moved away, some of us stayed. I suspect there are wide variations in income. However, mobile phones are a key part of all our lives and contain some of the most precious information we have.

This is where the value of mobile lies. People have much more intimate relationships with their phones and phones are with people wherever they go. People can count on having their phone with them whenever they need something, and increasingly we can count on the phone to be aware of where the phone and its owner are at any given time.

Organizations that figure out how these new layers of context fit in with their product and their consumers’ lives will profit from mobile. Organizations that put out a mobile web site because it’s cheap and easy, very likely will not.

It’s not that mobile web sites don’t have value. They do. However, having a mobile web site is just the first step toward mobility, not the end-game. Mobile web sites ensure that, with a bit of work, almost anyone can reach your information when they really need it. In most cases, it doesn’t mean that it’s easy or something they enjoy doing over and over.

Organizations have to find ways for consumers to instantaneously connect their lives with your products when they whip out their phone on a whim. The benefits of this are numerous: better brand perception, better brand awareness, better word-of-mouth, more customer loyalty. In many cases, this connection can be a sales or advertising opportunity that increases revenue and/or adds customers.

Throwing together a small copy of your website that fits the dimensions of any phone is not a mobile strategy. It’s a part of your implementation.

The demographics of the Hispanic market in the U.S. are ideal for mobile banking. As a group they are younger than than the overall population. They are more likely to have a smartphone and to have text or data plans. Their numbers are also growing rapidly.

So, I am surprised at how few Spanish-language mobile banking implementations there are in the U.S. There are probably a few browser based sites, but the only ones that come to mind for me are in Puerto Rico. IBC Bank in Texas has a Spanish native application, but you have to either download the English or the Spanish version. I haven’t run across a Spanish SMS implementation either. If you know of multi-lingual mobile implementations please share by leaving a comment on this blog.

The Mobile banking era is SO over.

I don’t mean that mobile banking isn’t going to happen. Mobile banking is happening and is expanding. What I do mean is that we have already passed through a cycle that lasted around five years for online banking. I assert that we are now in the Post-Mobile Banking era.

Many mobile banking vendors have popped up sold their software, implemented (or claimed to), and exhausted their useful lives. Core vendors have snapped up the remains of these mobile vendors. In fact in some cases, the core vendors have entered into puppetmaster partnerships with ailing mobile banking companies that allow the core vendors to control the mobile product offerings without even having to make an investment. Mobile banking is rapidly consolidating. Soon there will be just a few offerings from the folks that offer your banking cores and/or online banking systems.

At the end of the day, like Dorothy in the Wizard of Oz, what we’re learning is what we already knew. Mobile banking is another banking channel. It’s a way to reach new customers, hang on to old customers and reduce costs in the process. Mobile banking is more than just picking a product from a vendor and turning it on. Mobile banking touches the entire bank and its relationship with its customers. Adding mobile affects operations throughout the bank. Banks must prepare for both benefits and challenges throughout their organization when they add a new channel.