Technology is radically changing the way bank customers interact with their providers, and mobile touchpoints are at the forefront of this change. In the past five years, mobile banking adoption in the US has more than quadrupled, hitting 17% by the end of 2011. This represents a compound annual growth rate (CAGR) of more than 33%.
As such, eBusiness professionals and mobile strategists at banks are in a white-knuckle contest to out-do each other in the mobile space. To evaluate and gauge banks’ mobile offerings, we applied Forrester’s Mobile Banking Functionality Benchmark to the four largest retail banks in the US.
What we found:
Big US banks offer solid, not-yet-splendid, mobile services. We employ 63 individual criteria in our Mobile Banking Functionality Benchmark methodology. The combination of weightings and scores for the criteria generates an overall score based on a 100-point scale. In our inaugural ranking, the four largest US banks posted an average score of 63 out of 100 – above our minimum standards but far from perfect.
The past five years have been awful for most European retail banks. The financial crisis, and the resulting recessions in most of Europe's economies, nearly destroyed some banks and crushed the profitability of many of the remainder. Worse than that, it was a problem that was partly or largely of (some) banks' own making. Banks are being forced to shrink their balance sheets, sell off non-core businesses and cut costs (i.e. fire employees) just to survive. And Europe's ongoing financial crises are far from over as banks' fortunes are closely entwined with those of their indebted governments.
There's one small silver lining among these dark clouds. Over the past 15 years, eBusiness has evolved from providing an electronic brochure to become a fundamental strategic function within retail banks. One of the effects of the financial crisis has been to force most European banks to focus on how to generate profits in their core retail banking operations by serving customers efficiently. Digital banking is a big part of the answer. So, despite the bleak economic outlook, most retail banking boards know that they must continue investing in digital channels. Digital strategy is an increasingly important component in overall strategy.
I'm still surprised when I find heads of eBusiness who remain marginalized within their firms, reporting into IT or marketing rather than a centralized distribution channels function alongside branches. The leading banks no longer make that mistake. That has greatly increased the power and influence of digital banking executives, but also their responsibility for the overall success of their businesses.
Here's our view of the top five priorities for eBusiness and channel strategy executives at European retail banks:
As I started my Market Overview of mobile banking solutions, one thing was apparent: the vendor landscape is in flux. To further demonstrate this point, over the last few weeks, Montise announced acquisition of Clairmail and Clairmail announced Clairmail Plus, a solution targeting mid-tier regional banks, community banks, and credit unions. With the constant movement, it’s not easy to navigate through the vendor landscape. Whether you are a trailblazer looking to expand your mobile banking offering or looking to deploy your first mobile banking solution, eBusiness professionals must keep the following in mind as they evaluate mobile banking vendor solutions:
The mobile banking vendor landscape is changing. Vendors are either going out of business or being acquired. This shift has challenged eBusiness professionals to either select a new vendor or determine how acquisitions will impact mobile banking services and their strategic roadmaps.
A vendor relationship can hinder or enhance your mobile banking strategy. While past decisions may have been driven by speed to market or cost consideration, those decisions now may be preventing eBusiness executives from meeting strategic or functionality goals. As eBusiness executives look for next generation mobile banking solutions, partnering with a vendor that has an understanding of industry shifts, device evolution, and user trends will help clients extract the most value from mobile solutions.