Monday, August 19, 2013

Top 10 Mobile Banking Mistakes

There’s plenty of great information out there for consumers about the dos and don’ts of mobile banking—password protect your device, use caution with what apps you install on your phone—but there are also plenty of mistakes financial institutions make when it comes to mobile. 

Let’s look at what may be considered to be the top ten.

By Danny TangWorldwide Channel Transformation / Front Office Solutions Leader, IBM Global Banking & Financial Mkts

10. Not going for 100% mobile banking adoption  The adoption rate for mobile banking should be 100% of those customers who have a mobile phone. And yet, many banks choose to limit themselves by requiring users to activate in online banking or enroll at a local branch. This reflects the fact that mobile is still an afterthought for many banks.

9. No Balance Between Security vs. Usability  Can’t we have both? It’s remarkably easy to lose your mobile phone, which makes it especially important for banks to safeguard user information. While banks should absolutely secure mobile banking beyond just ID and password, it shouldn’t be impossible to use, either. Does it really make sense to ask users who their favorite teacher was in elementary school, or require everyone to carry another device just to log in to mobile banking on their smartphone? Risk-based authentication, geolocation, biometrics—these and many other technologies are available to help banks find the right balance between security and ease-of-use.

8. Cutting Corners in Education  Should we assume that all smartphone users are smart? This is especially true for security. No technology today (that I know of) can prevent a user from writing down his/her ID and password on a paper attached to the back of the phone. An educated user is your best defense against fraud and loss of privacy. If you teach customers the value of security features—and how to use them—they’ll be happy to see those authentication layers instead of cursing at them.

7. No Consistency in User Experience Across Platforms  Does your Android app look like it’s from a different planet than your iPhone app? People shift between platforms, and lack of consistency is confusing—and annoying. Banks should invest in a MEAP (mobile enterprise application platform) to help teams ensure a consistent user experience between environments. A MEAP such as IBM Worklight can enable write-once-deploy-across-many-platforms that both saves cost and improves user satisfaction.

6. The “X2 Button” Tablet App  If your iPad app strategy is to tell users to push the X2 button, you’re missing an opportunity to provide customers a richer banking experience. You’re also providing an interface that’s downright clunky. Tablets aren’t going anywhere soon, so don’t waste the screen real estate your clients have paid a premium for—invest in a tablet-friendly user experience with dedicated features such as spending analysis and retirement planning.

5. No Love for the Mobile Team  Is your mobile team stuck in a corner of basement? For many customers, mobile is how they most frequently interact with your bank. The mobile banking team deserves more love from bank execs. Mobile should be at the center of your channel strategy—and your planning meetings.

4. One App Fits All  Consider providing a unique app for each major customer segment (retail, mass affluent, small business, and so on). Different customer segments have different needs. Mass affluent clients appreciate more financial analysis, while small business clients would rather have mobile invoicing and collection. Don’t assume you can satisfy everyone with the same solution.

3. No Roadmap to ROI  Mobile shouldn’t just be a cost center. What’s your plan to profitability? In the interest of “getting something up and running,” many banks lose sight of the long view. When it’s done right, mobile banking can be a valuable sales and marketing tool that can build loyalty, cross-sell products and yes—generate revenue.

2. Me-Too Syndrome  One of the worst mistakes a bank can make when going mobile is adopting a “me-too” approach. When you outsource to a company that creates and hosts mobile banking for your competitors, you’ll end up with a mobile banking app that looks just like your competitors’—and one that provides zero differentiating value.

1. Not Realizing that Non-Banks are Eating Your Lunch  Non-banks such as Square and PayPal have been riding the mobile momentum for some time now. And Google, Apple, Walmart and others have their eyes on the revenues traditionally enjoyed by banks through mobile payment and wallet apps. Does your bank have a strategy for dealing with cross-industry competition and disintermediation? (If not, how well have you been sleeping these days?)
So, what other oversights have you seen in mobile banking lately? Share your own top mistakes—as well as best practices for success.

About the Author

Danny Tang leads the Customer Care and Insight (CC&I) Framework for IBM’s global banking organization. Prior to his current role as CC&I Framework Leader, Tang was on assignment to China between 2009 and 2011 as the Executive leading IBM Software Group’s Financial Services Industry Solutions team for the Greater China Group. Before that, he was IBM’s Worldwide Executive Consultant advising financial services firms around the world. 
Tang joined IBM via its acquisition of CrossWorlds Software, Inc., where he spent several years architecting EAI and B2B solutions. Prior to CrossWorlds, Tang worked for top consulting firms including Andersen Consulting (now Accenture).

Note: This post originally appear on 'Insights on Business'. This is probably the best post I have seen around what banks may be doing wrong in the mobile space. The post has been reprinted with permission from the author.
Subscribe to Bank Marketing Strategies


  1. Another possible mistake regarding mobile for banks or credit unions is that of internal employee adoption. Many times we are focused on external adoption but what can help drive that could be internal employee adoption of mobile services:

    1. This is an excellent point. As with any service, the best way to encourage sale of a product is to ensure all of your customer facing staff also believe and use the product. Thanks for your addition.

  2. This is a good list, thanks for sharing. The only bullet I would take issue with is #4. Publishing multiple apps to the markets is very expensive to develop and maintain. I also believe it is confusing for the FI's customers. A solution that allows FI's to unify all mobile enabled/optimized sites (regardless of vendor) into one downloadable app, and include the ability to control the app experience by device would be ideal.

    1. Thanks for your thoughts. The challenge could be in the wealth management, small business and even commercial areas, where the needs of the customer differ significantly from the typical retail customer yet there is still the ability to leverage the mobile channel. Your option may also work, but could potentially cause confusion from the customer perspective and begin to look like the online application which is definitely different. It becomes a balancing act between simplicity for the customer (minimize the number of click to reach a solution) and simplicity for the bank in development of the app.

  3. This comment has been removed by a blog administrator.

  4. Hi, Its a good list. Being a product manager for Mobile banking solution, we come across all the points which are listed above. I like point 4 which is where most of the Banks go wrong. But slowly Mobile Banking will become maximum accessible channel on Banking. Moving forward i foresee many services which will get added to basic ones like-

  5. Customer adoption is a big thing when it comes to holding on mobile policies. With the spread of smart phones and tablets around the market is a big advantage however the goal is not clear when it comes to those financial institutions that venture into mobile.