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Virtual Branch Myth #2, Part 1

There are many in financial services who believe that mobile banking is a channel of its own, distinctly separate from other online banking applications. They theorize that only when mobile is decoupled from all other online capabilities can mobile grow, expand and capitalize on its unique capabilities.

Those who argue for a mobile-only strategy usually believe in the following myths:

1) Online banking will restrict mobile from growing as it normally would.

2) Mobile is the next evolution in online banking and that traditional online access is archaic and antiquated.

3) Mobile and online channels are different and therefore deserve their own distinct applications and systems.

To me these three myths are all part of one misconception: that the mobile channel can be successfully decoupled from other online services. To gain a better understanding of the issue at hand, these myths must be thoroughly explained and debunked. Due to the amount of information needed to discuss this topic, I will break this topic up into multiple blog entries.

Mobile Is a Channel Myth #2, Part 1: Internet banking will hold mobile banking back.

In order for you to believe that online holds back mobile, you would have to assume that mobile will only take on all of the features that online offers.  Since so many financial institutions have online systems that are so far removed from the expectations of their customers, offering only the most rudimentary functionality, it is easy to see why they would be attracted to the bright shiny object that mobile represents compared to their antiquated online system.

There is no question that PC sales are down while at the same time the sales of mobile handsets and tablets are off the charts. But without a synchronized mobile and Internet offering, consumers and FI support personnel alike must deal with a separate verification, authorization and issue resolution processes.

Rather than holding mobile back, Internet banking acts as an additional integrated resource for consumers.

Consider this example: suppose a consumer takes a photo of a check with a mobile device to make a deposit. Twenty minutes later, the same consumer is trying to verify if they have enough money to buy that flat screen TV they have found on sale – today only!. The mobile deposit will probably show up in the online system, but will the customer’s mobile available balance match up with the online balance? If the systems are separate, there is a good chance that they have separate interfaces to the core system that holds the balance information.  Separate interfaces often mean mismatched information.

Here’s another example, suppose a consumer creates a bill payment on their non-integrated mobile device. The bill payment goes through fine. When it’s time to pay that bill the next month, they find it on the mobile device and make the payment. The following month, when they need to pay the bill their mobile device is not available. So they use a friend’s computer to access their financial institution via online banking and look for the bill payment vendor. Only it’s not there because the FI has a mobile strategy that is not integrated into all of the access points that the customer can use. This same scenario plays out for issues such as support, security, authorization, dual control, and so forth.

Embracing a mobile strategy based on concerns over outdated online banking technology is a compromise that leads to future obsolescence and a poor consumer experience. Instead, to be successful, FIs need to focus on providing an integrated experience that maximizes each access device for its unique qualities while ensuring that data, transactions, security protocol and user interface are consistent. This channel of one strategy is central to retaining current and attracting new customers.

Check back soon for my next blog post – Mobile Is a Channel Myth #2, Part 2.

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