Mobile Banking Changing the Way People Bank

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1 Mobile Banking Changing the Way People Bank Mobilearth Life is mobile, and your financial institution should be too. Find out about the next level of banking in this white paper. White Paper January 2013

2 Overview Strategic Growth With Mobile Banking Capture and Retain Users Strategic Marketing Reduce Service Time Gain the Competitive Advantage Security Mobile Banking From Mobilearth Page 2 of 10

3 Overview Mobile Banking is changing the way users interact with financial institutions and even shaping the financial industry itself. Countless case studies prove that the onset and rapid rise in popularity of Mobile Banking is allowing financial institutions to implement the Mobilearth solution to easily level the playing field and offer similar high-impact mobile products to reach a wider range of users. Mobile Banking is an easy-to-implement solution with a huge impact on growth, improving customer service, and increasing user retention and acquisition. In addition, with the efficiency Mobile Banking brings to a financial institution, it also provides a proven means of reducing overhead costs. Mobile Banking is a highly secure, allowing financial institutions and their customers the peace of mind to bank with ease from anywhere. Financial institutions continue to observe steady declines in branch transactions and accompanying foot traffic [We see] 45% of respondents anticipating declines from 10% to 25% over the next five years, one-fourth expecting 25% to 40% declines, and about 20% expecting steep declines of up to 60% over the next five years (-12% CAGR). i Strategic Growth With Mobile Banking As demand rises for mobile technology, more people are inspired to leave the branch behind. Users enjoy the convenience of Mobile Banking so much that financial institutions continue to observe steady declines in branch transactions and accompanying foot traffic, while mobile access steadily climbs. vi As mobile becomes the most popular access point for financial institutions, the initial Mobile Banking investment yields even greater returns over time. Page 3 of 10

4 Since implementing Mobilearth Mobile Banking, our branches have become more efficient in a number of ways. We have seen a decrease in members coming in to branches for simple transactions, allowing us more time to take on a consultative role and spend more time with members with larger issues. ii The branch model for banking is deteriorating quickly, as institutions come to understand that branches are a costly and stagnant resource for users that are increasingly accustomed to interacting with providers via mobile devices. Those who fail to innovate and capture users via mobile devices do so at their own peril. Banking with mobile devices gives users an incredible amount of convenience. Mobile Banking users are more engaged and profitable than the average. For one institution, their average Mobile Banking user is twice as profitable as [the] average member, vii allowing for exponential growth. Capture and Retain Users Studies show that Mobile Banking helps attract and retain users with more frequency and higher success than branches. Users who are able to perform transactions, update information, and even open new accounts are happier with their financial institution than those who must go in to a branch or even make a phone call to perform the same functionality. Incredibly, the average Mobile Banking user has 46 interactions per month with Mobile Banking apps, or 1.5 per day. viii This means more interaction with the institution and more chances to develop a strong, lasting relationship. Page 4 of 10

5 In a highly competitive market, mobile banking can be a differentiator. Banks understandably do not want to miss out on a rapidly growing new market of consumers who value flexibility and convenience. The market is especially attractive because early adopters tend to be relatively young, tech-savvy, and relatively well off-just the sort of customers that financial institutions want to enroll and keep. iii In a recent poll, 50% of financial institution users reported that online services were the key to convenience. ix Mobile and Online Banking can level the playing field by offering users a similar amount of functionality across the board, with easier implementation than traditional channels. The bottom line is that users will search out institutions with Mobile Banking, and those who are left without it will lose out. The largest market for Mobile technology is the younger generation. Generation Y is twice as likely as an everyday consumer to be a mobile banker and 31 percent more likely to review account balances regularly via mobile banking. x Embracing Mobile Banking is a vital step in attracting this generation, who will drive business in the future. Page 5 of 10

6 Strategic Marketing With marketing opportunities built in to the Mobilearth system, employees can create customized marketing blasts by targeting specific users for promotional products and rates. Additionally, institutions can curate customized, interactive text marketing campaigns that allows users to respond to and receive specific answers to interact with the institution. The Mobilearth system creates new opportunities to target and market to users at no cost, increasing the value of each user and providing significant return on investment. Customizable messages allow advertising to reach an everexpanding group of Mobile Banking customers. The online and mobile channels are now considered more strategically important than the branch channel by a majority of financial institutions. xi No other channel enables strategic and rapid growth like online and mobile and the evidence is only rising. Reduce Service Time Our call centre incoming communications have seen a decrease as well, as members can now get basic account information directly on their phone. iv The Mobile Banking investment doesn t just provide opportunities for growth. With that growth comes dramatically decreased call centre time, branch service lines, and customer service requests overall. When U.S. users of Mobile Banking were asked how mobile has changed their use of other banking channels, 43% said they had made fewer phone calls to their bank s call center since adopting Mobile Banking and more than one-third (35%) said they visited branches less often than they did before adopting Mobile Banking. xii Page 6 of 10

7 When users are able to use their mobile phones to instantly obtain information about their accounts, the effect is more time to provide thorough service and account advice to other users. Mobilearth s secure messaging module allows users to send messages with personalized content in the course of routine banking activities, such as making transactions. Simple questions are sent and answered quickly and easily, reducing lengthy calls and improving the customer service process. Our members are incredibly happy with the Mobilearth suite, and we have noticed an increase of word of mouth referrals due to our apps and mobile services as a whole. We are elated that this service helps keep our members satisfied with our services, and gives us a competitive edge in the market. v Gain the Competitive Advantage As the trend towards Mobile Banking rises, customers will continue to search for financial institutions that are able to offer Mobile Banking. Institutions which already implement Mobile Banking have an increased ability to retain existing customers, as satisfaction increases in having this option. Not only are our existing members happier with our services, we are able to attract new members who are seeking out institutions that will allow them to control their finances with a busy lifestyle. Being able to offer a variety of mobile services, including SMS banking, apps, and mobile web allow us to cover a wide range of members and capture the biggest percentage of new potential members. Mobile Banking has helped our institution grow, and because of that, we see it as an invaluable and high-performing return on our initial investment. xiii Offering Mobile Banking also provides institutions with an advantage over the competition, leading to new customer growth. Page 7 of 10

8 Security Since nearly all smartphones have built-in GPS capabilities, financial institutions can use this to verify that cards and phones are being used by the same person. This helps ensure safety in transactions and helps prevent fraud. Multi-factor authentication ensures only registered devices can access a user s account. Your mobile banking identity is tied to a specific phone: Done correctly, your mobile identity can be linked to a specific device, making traditional man in the middle security compromises much less relevant. xiv GPS locators can ensure that a phone linked to a certain account is in the same area as the card linked to the same account, helping to prevent issues with fraud if a card is stolen If a customer loses their ATM card, they can report it directly from their smartphone, eliminating the need to recall phone numbers or card information they may not have on hand. Page 8 of 10

9 Mobile Banking also makes use of unique device authentication, ensuring only authorized devices can access the Mobile Banking services of a particular financial institution. Passwords and account numbers are not stored in the device, so concerns about fraud are abated. With multi-factor authentication, users can ensure that they are the only ones accessing their account from their phone by receiving e- mail alerts with an MFA code when they attempt to sign on. In the event that an account is being accessed fraudulently, MFA alerts make it easier to track these events. Mobile Banking From Mobilearth Contact Mobilearth today for your Mobile Banking solution. Call or contact info@mobilearth.com to find out more or set up a demo. If your financial institution is not mobile, you run the risk of losing customers to rival institutions that have already caught on to the trend. Mobile Banking is necessary to stay competitive in the marketplace and ensure the long-term vitality of your financial institution. It will reach the ever-important Generation Y and remain secure, offering all customers with reliable and efficient banking solutions. Mobilearth is proud to offer the largest multi-channel, fully integrated Mobile Banking system available. Featuring text (SMS), mobile browser capability, smartphone apps, and Internet (PC and laptop) banking channels, Mobilearth is one of the most feature-rich Mobile Banking providers available today. Page 9 of 10

10 i ii Paula Miller, Senior Vice President, Legacy Community Federal Credit Union iii iv Paula Miller, Senior Vice President, Legacy Community Federal Credit Union v Paula Miller, Senior Vice President, Legacy Community Federal Credit Union vi vii viii ix x Javelin Strategy & Research: Gen Y: How to Engage and Service the New Mobile Generation xi xii xiii Paula Miller, Senior Vice President, Legacy Community Federal Credit Union xiv han_online_banking.html Page 10 of 10