Monday, January 18, 2010

Online Customers Aren't the Only Target for Mobile Banking Services

While attending the 2009 Mobile Financial Services Congress in Miami a little over a month ago, there was a consistent message from almost all of the speakers that a mobile banking customer is less likely to attrite, more likely to use additional engagement services such as bill pay, and less costly to serve.

Interstingly, it was also emphasized that while most banks have promoted the use of mobile banking to their current online banking customers, the real financial benefit is realized when a customer who is not as heavy a user of online banking is converted to the mobile channel. In other words, it makes stronger financial sense to try to segment offline customers and implement a proactive channel migration strategy to convert channel usage.

Some of the presenters at the Mobile Financial Services Congress suggested that offline customers who are quickly purchasing the newest wave of smart phones may actually bypass the online channel in favor of mobile banking services.

M-Com and Fiserv presented the findings from recent research that reinforced this trend. Nearly two-thirds of those surveyed reported contacting their financial institution once a week or more through traditional bank channels. Nearly half of survey respondents use their bank's call center or interactive voice response to help manage their finances. These are among the costliest channels for the bank to support, with each call center transaction costing an average of $3.75 and each automated voice response system transactions costing an average of $1.25. Conversion of even a small percentage of these transactions to the mobile channel would bring high returns. The study also found that the offline customer not only is aware of mobile banking (70%), but also have an interest in these services (60%). The primary area of interest is in checking balances (46%), contacting customer service (37%) or locating a nearby ATM or branch (30%).

It is clear there is a tremendous untapped opportunity for converting offline customers to the mobile channel with enhanced targeting, expanded enrollment opportunities (channels other than online) and improved communication of benefits of this channel. The banks that are the most aggressive in reaching out to these households will reap the greatest rewards

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