Banks Sit On Sideline As Tablet Growth Continues

According to PEW Research Center, tablet adoption has almost doubled over the past year and for the first time, a third (34%) of American adults currently own a tablet computing device, including almost half (49%) of those in their late thirties and early forties and a majority (56%) of those in higher income households.

With this platform becoming increasingly important to customers, banks and credit unions can no longer sit on the sidelines and watch as the digital landscape develops around them. Unfortunately, with limited resources, new research indicates that development of native tablet apps has occurred at a snails pace due to limited resources and a focus on developing new smartphone applications.

In a just released report from Celent entitled, Tablet Banking: An Evaluation of Tablet Apps at the Top 13 Banks, it was found that only seven of the top thirteen US Banks have a live iOS tablet app, and only two of the top banks have a native Android app. In many cases, banks are using their online banking platform as the foundation for tablet users or are making adjustments to their web portals for tablet use.

“Consumers are rapidly growing more accustomed to interacting with their financial institution through devices other than PCs,” says Jacob Jegher, Research Director with Celent’s Banking Group and co-author of the report. “Celent believes that tablet banking represents a tremendous opportunity. However, banks aren’t exactly scrambling to release tablet specific apps.”

Unfortunately, the lack of commitment to the tablet user is not a new phenomenon. In May of 2011, I covered this problem in a post entitled, Banks Slow to Embrace Potential of Tablet Computing. 

Tablets Require Special Attention

As part of the Celent study, it was found that many banks remain unclear as to how the channel should be classified. Is the tablet platform an offshoot of online banking? Is the platform better supported by the mobile banking team? In reality, tablets are a unique platform that deserve individualized attention. According to Stephen Greer, Analyst for Celent and co-author of the report, "Tablets take the best of the PC and the best of mobile and combine them into a device that offers functionality, portability and a rich user experience."

Use cases also need to be taken into consideration when working with multiple platforms according to Greer. "Online banking is functional, complex, and a daytime/work activity, while mobile is quick, contextual and on-the-go. Tablets, in contrast, are often leisure devices, catering to casual couch browsing and intermittent time killing." In addition, since many people multi-task with a tablet device (watching TV, etc.), the visual and tactile functionality of the tablet must be leverage to optimize the user experience.

Because of the interactive dynamics of this platform and the large number of device manufacturers and dimensions need to be supported, a larger investment in development and testing is required. In addition, to date, many organizations have had difficulty measuring the incremental financial impact of this investment. This may be the reason supporting this platform has been so slow.

Evolution of Tablet Banking

While the primary emphasis of the Celent report was a very thorough review of each of the top 13 US banks' tablet application(s) with detailed visual support and commentary on each bank's execution, there was also a review of key trends in the tablet banking marketplace. These trends were reinforced by other research done by Mapa Research in March and Fiserv in a report last month.

• Interactive dashboards that leverage the tactile benefits of the tablet
• PFM tools that add value through unique visualizations of financial insights
• Social media integration beyond customer support and promotion
• Unification of devices to provide common looks for basic functions
• Easily accessible insight such as balances, ATM/branch locations, etc.
• Focus on simplicity using photo capability for account opening, mobile deposit and bill pay
• Speech recognition to minimize keystrokes and improve user experience
• Enhanced security potentially leveraging biometrics

Why People Leave Their Bank

According to seventh annual household banking survey of 5,000 households conducted by Javelin Strategy and Research, it appears that fees and customer service continue to be the primary reasons a person leaves their bank (in addition to moving). What may be surprising to some, however, is that many millennial (ages 18-24) leave their bank due to the lack of ATMs while there is a growing percentage of households moving to a new bank to get mobile banking services. In fact, according to the study, 'ATM availability' edged out 'online features' as a factor that can predict customer attrition.

Small Business is Big Business

While most banks are spending more time and resources trying to address the needs of small businesses, a large percentage of this segment is still underserved. According to a Javelin Strategy & Research report released last year, about two-thirds of the 26 million small firms don't have business banking accounts.

Smaller companies usually integrate their business and personal relationships or simply open another personal account according to the Javelin report released late last year. That means they may pay lower account fees, but also don't receive cash flow and treasury service attention from a bank's small business sales team, potentially impacting the business' ability to grow.