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Making Up for Lost Ground in Mobile Banking

Nearly every day, the financial technology press publishes new, eye-popping statistics on the trends in mobile banking and finance. Here are some of the more telling stats that I have seen recently:

  • By 2015, Forrester predicts that one in five US adults will be using mobile banking.

  • Mobile customers are the new "sweet spot" segment for the banks.  They are younger, they are more affluent, and buy more financial products.

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Source: Forrester Research "US Bankers Want More From Digital Banking", April, 2012

  • "Tablet Banking" is now an established channel, and is tracked separately from Mobile Banking.
  • At a conference I recently attended, one bank reported a 70% drop in Mobile Web Site traffic over the past two years. The decline is attributed to customers adopting the bank's native mobile app.
  • They also reported customer usage patterns as follows:
-- Branch: 1-2 visits per month.
-- Web Site: 7-8 visits per month.
-- Mobile App: 28-30 visits per month.
  • Cannibalization of the web channel is underway in banking, and some banks are now experiencing a reduction in web sessions.
  • Multiple banks are now reporting that they are expecting and planning for the web-to-mobile crossover by 2014 or 2015.
Why is Mobile Banking so Hot?

Research shows that younger, more affluent and more profitable customers are the first customer segment adopting mobile banking. These same customers are also visiting more frequently. What are the drivers behind this? Mobile banking is all about convenience. Mobile check deposit is a good example of this convenience. If you have not tried mobile check deposit with your bank, please try it. Experience this first hand, and you may never deposit a check in an ATM again. Remote deposit capture (RDC) is now "table stakes" and a great example of the convenience of mobile banking.

No login required banking apps:

Many banks understand this "convenience" driver very well.  Some banks understand, for example, that the username/password step in a mobile banking app significantly degrades the user experience, and are experimenting with "no login required" apps.  Below is one example.  Launch the banking app on your Smartphone and you will immediately see your account balance.  No login required:

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Voice control banking apps:

Voice control is another feature which is starting to emerge in the market.  Before long you will be able to ask your phone "What is my account balance".  While the technology, security, and other challenges are not there yet to allow full, two way voice interactivity on a phone, firms are working on this.  Here is an example trading application, available today, which allows one-way voice control to a mobile trading application:

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The lost decade: Mobile performance:

Despite adoption trends, poor performance can eliminate any of the convenience and other benefits of mobile banking.  Mobile performance is perhaps ten years behind desktop web performance.  Both Keynote and Compuware rank banking web sites and mobile sites, and the results are not great. Keynote's latest rankings show the average mobile banking home page takes 7.4 seconds to load, vs. 7.3 seconds for a multi-step account balance check on desktop banking sites. Compuware reports similar disappointing performance on mobile banking:

Compuware US Banking Average    Performance    Availability    Consistency
Web Site                                      2.5                  99.8             1.6
Mobile Site                                   12.0                97.8              9.5

As shown above, performance is not the only problem.  Availability and consistency are also user experience killers.

Conclusions:
Mobile banking innovations aimed at convenience will continue to evolve rapidly and draw customers.  Banks need to understand not just their mobile usage trends, but the segmentation and demographics of their mobile channels.  Poor performance and poor reliability can negate the convenience benefits of mobile banking and drive your customers away. 

In future blogs I will examine some of the reasons behind poor mobile performance, and show you some of the tools available to examine the performance behavior of native mobile applications.  In the mean time I invite you to contact me directly with any comments or questions.

Rich Bolstridge is Akamai's Chief Strategist for Financial Services


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