Financial institutions have many choices when implementing a mobile banking solution. The majority of community banks do not have the resources to develop a mobile application in-house so they will most likely implement a mobile platform from a software vendor. Popular banking software providers include BankServ, S1 Corporation and Cpay360.
Community banks must offer robust and intuitive mobile banking apps to compete against large national banks and attract new customers, especially tech. savvy Gen Y consumers. Banks also benefit with the ability to sell more services to existing customers, retain current customers and reduce operational costs. In order for a bank to reap these benefits their mobile app must include many key features.
The number 1 feature that all mobile apps must have is security and fraud controls. Mobile payments in North America alone are estimated to reach $288.4 billion by 2014, a fact that has the attention of hackers and enterprising criminals. Banks should choose a mobile platform that ensures all standard Internet banking security features are applied at login including multifactor authentication and 128 bit SSL encryption while the app is in use. The banking session should also automatically end when the app is closed. It is interesting to note that Javelin Strategy & Research estimates 30 million people in the United States engage in mobile banking, and half of those customers do not think mobile banking is secure. Clearly the benefits of mobile banking outweigh the possible risks in the minds of consumers.
Graphical User Interface
Consumers have become accustomed to interacting with many types of mobile applications ranging from games to online newspapers. When choosing a mobile banking application it is important for financial institutions to choose a platform that is intuitive for consumers and it easy to navigate. Large buttons and full screen menus with limited scrolling requirements are good features to have in a graphical user interface (GUI). Apps that rely solely on SMS text messaging commands should be avoided. Consumers are used to interacting with full service applications at the touch of a button not texting specific commands such as BAL CHK1 to check a specific account balance. People enjoy texting their friends, not their bank.
Bill payment along with balance inquires are simple features that all mobile banking applications should have and are important to customers. The ability to check account balances and pay bills on the go is the main reason why many customers use mobile banking apps. The software should provide real time account balances and integrate smoothing with a FI’s Internet banking system. Apps that do not routinely sync with Internet banking platforms are frustrating for customers to use and may increase calls into customer support.
Fund transfers are another basic feature that consumers expect when using a mobile banking app. The ability to transfer money between accounts quickly and securely is a trait that community banks should be sure to offer their customers. Many community bank customers do not utilize a community bank as their primary financial institution and will find the ability to transfer funds to accounts at other institutions attractive. Community banks can strive to win over these customers and eventually become their primary financial institution (PFI).
Mobile deposit allows customers to deposit checks with a smart phone by taking a photo of the check and submitting it to the bank for processing via the application. Mobile deposit is a popular feature because it is convenient and saves customers a lot of time. Mobile deposit also increases cash flow and allows customers quicker access to their money. If a bank chooses to offer mobile deposit it is important to ensure that the software vendor includes tools to assist in risk management such as duplication detection and fraud monitoring.
Person-to-person (P2P) payments or fund transfers are becoming more popular. Javelin Strategy & Research forecasts that 60 million American households will use P2P transfers by 2014. The most popular form of P2P transfers is PayPal but there are many other providers available. P2P payments allow customers to send money to each other by mobile device, from one bank account to another. Customers may also use the service to pay bills from businesses that accept P2P payments. The best P2P applications allow customers to transfer funds between accounts that are not held at the same financial institution.