Friday, November 11, 2011

Banks Must Develop Apps for Tablet Banking

According to Javelin Strategy and Research's just released third annual report, '2011 Mobile Banking Financial Institution Scorecard - Money Begins to Move on Mobile', tablets are the next wave of technology that will have a major impact on mobile banking. Similar to the smartphone, consumer adoption of the tablet is increasing rapidly and financial institutions will need to quickly accommodate this platform with a user experience that is unique and different from any other platform.

"The tablet is going to be a game changer.", according to Mary Monahan, executive vice president and research director at Javelin who oversaw the development of the new research. "Eight percent are already on a tablet, which is a huge amount when you consider how long the tablet has been out. . . . We think, with the mobile tablet, we will see much more mobile banking. " Link to Bank Info Security interview with Mary Monahan, Tablet: A 'Game Changer for Mobile Banking.

Of the top 25 banks reviewed in the study, 23 offered at least one form of mobile banking services (92%) compared to only 63% in June of last year and 48% in July 2009. In addition, 65% of the banks offered 'triple play' support (SMS text banking, mobile browser and downloadable apps). This was the first time more than half of the top banks supported all types of mobile phones for consumers to access their accounts whenever, wherever and however they wanted.

Financial Institution Mobile Banking Offerings, Javelin Research 2011

Compared to the growth in development of mobile banking applications, the support of downloadable apps for tablets is much slower. According to Javelin, only 30% (7) of the FIs surveyed provided a downloadable tablet app for the iPad, with Bank of America having a 60% market share. No bank currently offers a downloadable app for the Android or any other type of tablet. "FIs need to step up and provide mobile banking services specifically designed for tablets, because that’s where mobile banking is heading.”, said Monahan in an interview. 

The experience definitely needs to be enhanced on the tablet since the consumer will spend more dedicated time on the device at a sitting and expects the interactive capabilities of the device to be fully utilized. Being something of a cross between a computer and a smartphone, tablets benefit greatly from applications being written specifically for them so users can easily move through touchscreen menus. "It's an entirely new kind of device, and needs a new type of user experience to go with it," says Carl Tskahara, vice president of Clairmail. "It can't be smartphone banking, only bigger. And it can't be a shrunken version of online banking.".

One of the main differences between tablets and smartphones when it comes to banking is the time users have (and spend) with the device. Tablet banking is usually done at home where there are fewer user distractions and where a richer visual experience is expected. While banks develop native apps for the tablet, they also will need to make the transition between devices seamless. Citibank, for instance, just relaunched their homepage and online banking application, making the PC experience similar to an iPad application (see video here)

From a perspective of growth potential, 8% of mobile consumers own a tablet (it has only been 18 months since the iPad was released in April 2010). Since the introduction of the iPad, many new tablets have entered the marketplace including Android-based and Windows supported tablets that compete directly with the iPad as well as more moderately priced options such as the Nook Tablet (Wi-Fi and 3G) and soon to be released Kindle Fire (Wi-Fi). These developments are important to watch since Javelin indicates that 51% of current tablet owners have conducted banking on their tablet in the past year, with 34% doing so in the past 7 days.

Brand new research from eMarketer indicates that one in three online consumers will be using a tablet by 2014, representing 90 millions users or 35.6% of all internet users. In addition, the research indicates that iPad growth will continue. And while the share of market will decrease (to 68%), the number of users will double by 2014. Finally, the research indicates that the disparity between male and female users will decrease and that the average age of a tablet user will decrease (due to lower costs).

This holiday season could mark the tipping point for tablet ownership, with Retrevo Research indicating that as many as 69% of consumers are considering the purchase of a tablet. Potentially more interesting, the research finds that 44% would consider buying the smaller Kindle Fire, while 12% say they would not consider anything other than an iPad. This could threaten the tablet ownership dominance enjoyed by Apple and could indicate that tablet ownership is reaching the mass market consumer. 

It was also found that the presence of dual tablet families is increasing, with 20% of current iPad owners indicating they would buy another iPad and 27% saying they may buy a Kindle Fire. The question remains if owners of either the Kindle Fire or Nook will conduct banking on their devices or whether they view them as only e-readers, browsers or game units or if the less expensive units will be for children. 

The demographics of the Fire owner are likely to be different from those of the Apple iPad or other Android tablets, says Monahan. For instance, the age of e-reader owners skews older than that of the more robust tablets, with about 14% being 65 and older compared to 10% who are between 18 and 24 years old. "One of the problems banks will have with this group is that many in the older demographic are content with doing paper banking and are not even online." Monahan says. But as the capabilities and quality of experience of the higher end e-readers continues to increase, the potential to convert this base to mobile/tablet banking increases. 

Intuit Financial Services research found that consumers tend to interact with their financial institution 45% more often if they use a combination of both mobile and online tools. These customer also tended to have larger relationships and a better retention rate. "While we anticipate that there will be some mobile-only consumers, most people will be using multiple devices on any given day in the future," said Intuit spokesperson Tobin Lee in a recent interview. "Financial institutions must be prepared to deliver financial information and insights across multiple devices (PC, phone, tablet), optimized to the merits of each device it they are going to meet customer's needs. If they don't, someone else will . . . probably displacing a bank's relationship."

The desire for 'anywhere app access' was also discussed in one of my previous blogs and just released study from Oracle entitled, Opportunity Calling: The Future of Mobile Communications - Part Two which found that while there was a stronger preference to use a tablet for mobile banking (34%) compared to a mobile phone (11%), the majority of consumers (55%) would prefer to use both devices. This same study found that almost 30% of the U.S. mobile customers that do not already have a tablet device plan to purchase one in the next 12 months.
Obviously, providing a point-and-click online banking experience on a PC is no longer enough. Natural user interfaces need to be developed for newer devices with unique capabilities. Just like the rapid development of apps for phones has occurred over the past two years, banks need to move quickly as consumers seek out slicker and more transformational options on their tablets. While porting an online banking experience on to a tablet may work in the short-run, we need to adjust to a consumer base that lives with touch-based interfaces.

Is your organization building unique user interfaces for tablet banking? Is anyone building a new app for Android supported devices? Is there a market for a tablet banking application for use on the Kindle or Nook?

I would love to hear from you.


  1. It is not entirely true that no bank has an Android tablet app although I assume this was said in the context of the sample. In Netherlands where I live, ABN AMRO has one for example.

    Also, while most of these banks claim to have a tablet app, I wonder what kind of functions are offered over it - I suspect most of them offer payments & transfers,balance viewing and bits of non-financial stuff here and there. This however does not make it any better than what you can do on a smartphone and hence the adoption of tablet apps has been poor.Also, most haven't even thought of least of all displaying investment portfolios over the tablet under the same account. This is probably because of the silos on the organisational side but hey if you can aggregate it over web, what stops you.

    I believe the best segment to tap is the SME and mid-size corporate segment where the volume of transactions is higher and managing cash assumes higher priority than the retail segment. This should be supplemented by some strong configurable notifications which is critical to the treasurer or the accountant. Also there is enough potential to represent account information graphically over a tablet.

    The difficulty in getting there with this segment could however be around multi-user authentication. but then again with the plethora of identity and access tools around, most of them that provide device level configurations, how difficult is it.

    The problem as usual is always the ROI debate but why should it always been a revenue growth and not a cost decline.

  2. It's more important that banks and credit unions develop a mobile optimized experience than to designate any particular technology solution. It might be a platform specification application or a html solution built for the smaller screen face.

    What's different about the mobile devices and tablets is screen space, input devices, and usage patterns. So the puzzle for marketers is to optimize usage with these three factors considered.