Banks Should Consider Mobile, But Keep it Simple

Banks are goin' mobile.

Citibank, U.S. Bank, Bank of America, Wells Fargo, BancorpSouth, and most recently Regions Bank are already offering access to accounts and a variety of other services through rapidly advancing and ubiquitous mobile devices. And in the United Kingdom, banking via mobile is growing at a faster clip among consumers than the adoption of credit cards, online banking or ATMs, according to a report released Dec. 5 by U.K. forecaster Monitise PLC.
The sharp rise in iPhone and Blackberry sales in the latter half of this year is likely to drive further interest from banks and their customers, who'll want to see how they do with managing their money on the move.

But with little guaranteed short-term return on investment, banks need to tread carefully with mobile banking services -- focusing on services that leverage what makes mobile unique and for which they could potentially charge a fee. In a recent article in Bank Director magazine, Aite Group analyst Nick Holland opines that "there's not a great deal in terms of immediate revenue-generating potential [on mobile banking]. It's about accessing information."
In the early days of Internet banking more than a decade ago, banks could easily stick a toe in the water with a one-size-fits-all web site and online account access. Offering mobile access is a whole different story. Upfront development and integration costs much more due to the wide array of mobile devices and form factors -- a list of cleared checks or a bill payment screen is going to look a lot different on an iPhone than it will on a three-year-old Nokia. Wannabe-3G banks will also pay monthly per-user fees to their mobile banking service provider and regular per-user or per-transaction fees to whichever wireless carrier is handing off their customer's data or voice call.

U.S. banks are right to embrace mobile, but they'll need to keep it simple. Access through this channel will deliver banks closer ties to a new generation of customers who are typically eschewing a stagnant screen for their smartphone to do work and get information.

Successful new services will sidestep customers' expectations that reviewing checking account information and paying bills should be free, as it typically is through Internet banking. For example, banks may not charge for basic mobile bill payment, but they might levy a fee for expedited payments or for alerts to help them keep tabs on their accounts -- something that would arguably be useful to folks in these belt-tightening times.