NEW YORK, Feb. 9,  2011 – When banks enable their customers to use a mobile device to check balances, transfer money, pay bills, apply for credit or manage their personal finances, they can achieve  returns on investment of as high as 300 percent, according to a new study commissioned by Accenture (NYSE:ACN).

Banks generating the highest returns on their mobile banking investments achieved ROI by emphasizing customer convenience, providing rich exchanges of information between bank and customer and accurately measuring how customers use their mobile phones to bank, according to the research which was conducted by TowerGroup on behalf of Accenture.

“Bank customers want greater control over managing their finances and prefer to bank in ways that fit their lifestyles,” said Andy Zimmerman, director, mobility services, Accenture. “Technology is enabling customers to move beyond simple account notifications sent by text message from their banks to more sophisticated interactive applications.” 

According to Zimmerman, the mobile banking channel offers an opportunity for banks to create a meaningful dialogue with their customers, deepening loyalty and broadening the services to which their customers can subscribe. “Leading financial institutions that are communicating the value of these services to their customers are generating new revenue,” he said. 

“The pace-setting banks in this study have shown that high mobile adoption and return on investment hinges upon providing a suite of services that are relevant to their customers, educating customers on how to use mobile services and regularly measuring customers’ usage patterns and satisfaction rates,” said Noel Gordon, global managing director of Accenture’s banking practice. “The mobility market will continue to grow as banks adopt the best practices of those with successful mobile banking programs.”

According to the study, financial institutions with successful mobile banking programs:

• Fully understand customer’s expectations of mobility, such as their need to have the same experience on their smart phone as they have on their laptop.
• Minimize customer fees, which helps ensure greater customer engagement.
• Monitor and leverage the evolving functions of customers’ handsets and the platforms they use.
• Ensure that their staff is fully engaged in supporting mobile banking.

Successful programs can yield high return on investment

Among the 10 financial institutions studied, the key findings include:

• ROI of 300 percent. A Middle-Eastern financial institution has achieved a return on investment of at least 300 percent through customer education by showing its two million mobile banking customers how to access and use services, and offering new, convenient ways to pay bills online using their mobile devices, including “topping up” their pay-as-you-go mobile phones, paying utilities bills, or paying a fixed monthly fee for a premium services package.
• ROI of 230 percent. An Asia-Pacific bank has achieved a return on investment of 230 percent since launching mobile banking in 2007. It is transitioning from informational services – sending text message reminders to customers for example, to interactive services such as enabling customers to register online for mobile banking. The bank’s executives said the focus on engaging staff at branches and the call center was critical to success.  
• Annual customer growth of 60 percent. A European bank whose customers can check balances, transfer money between accounts and trade stocks with their mobile phones has achieved 60 percent annual growth of its mobile banking customers. The bank’s executives said support of multiple smart phone device platforms has contributed to success.

No time to post these days... So the best I can do right now is provide you with good content from elsewhere.

The number of U.S. adults who own mobile phones dropped markedly in 2010, falling to 74%, down from 85% in 2009. However, smartphone sales bucked the trend. About 20% of all U.S. adults now tote a smartphone, as do 27% of mobile phone owners. With about one in five consumers now using mobile banking, financial institutions must understand the mobile marketplace and deploy mobile‐banking platforms to serve customers who increasingly are choosing banks based on their mobile‐banking capabilities. Because only 18 of the top 40 U.S. banks now offer mobile banking, the time has come for financial institutions (FIs) to develop, improve upon, and deploy effective mobile‐banking strategies and solutions. Javelin’s “triple play” approach provides actionable steps that financial institutions can follow to increase mobile‐banking adoption and capitalize on the growing smartphone, “mobile‐banking friendly” segment.

Javelin analyzes the demographics and behaviors of mobile‐banking customers, mobile banking and smartphone adoption rates, mobile device offerings, carrier and model penetration, along with survey data that describes what consumers want and how they bank via mobile device. This report identifies key consumer segments to target, the most effective approach for reaching customers, and the features

Primary Questions:

• What does the mobile marketplace look like?
• What are the current adoption rates for mobile penetration, mobile banking, and both smartphone and feature phones?
• How does security factor into mobile banking?
• What do typical mobile bankers look like, and how do they behave?
• What is the best method to reach consumers on their mobile devices?
• How do different smartphones and their owners compare?
• Which smartphones are most used for mobile banking?
• Which carriers have the largest market share?
• What features and mobile capabilities do consumers desire?
• How should FIs prepare for the future of mobile banking?

I don't have access to the report... but I would venture a guess and say that some of the data presented in this report may help you decide as a Financial Institution how much weight (as part of your mobile strategy) you place on SMS Banking (or Text Banking) versus mobile browser and native applications.

I have more thoughts on this and I will expand on this any more topics related to mobile financial services over at the Mobile Strategy Blog (http://m-strat.org).

Be well!

Visualize this: A woman is pushing a loaded grocery cart through the frozen-food aisle when she gets a mobile phone alert. Her checking account balance has dropped to $100. Uh-oh, the food will be well over that amount.

But wait. Up pops a clickable ad, offering her the chance to sign up - right now - for overdraft protection.

That might be a marketing no-brainer, but it's still wishful thinking in mobile banking. "Banks are starting to ask for this capability," said Drew Sievers, co-founder and CEO of mFoundry, a Larkspur, Calif., technology firm that creates software for mobile banking and mobile payments. "But security risks are a big concern."

Sievers says current mobile marketing strategies have great potential for helping banks gain a greater share of customers' wallets. For one thing, financial services firms can partner with other businesses that want access to their customers, as Visa has done with Starbucks. A mobile gift card application that mFoundry created for Starbucks features a Visa advertisement. Those who use their mobile devices to reload Starbucks cards get an extra $5 added, if they pay with a Visa card.

Mark Schwanhausser, a senior analyst with Javelin Strategy & Research in Pleasanton, Calif., likes this type of partnership strategy. "Banks have incredible insights into how individual consumers spend their money," he says, "and they sit in a spot where they can play an instrumental role in directing coupons, offers, rewards and other savings to consumers."

Sievers says banks also should be looking to drive traffic to their own products and services by connecting with mobile users. Someone seeking real estate information on Zillow.com is a prime candidate for a bank's mobile mortgage ad, for example. "The banking industry has only barely begun to tap into this potential," he says.

Banks' mobile opportunities are different from those of other industries. A bank is unlikely to add new customers via a mobile ad, but it can grow revenue from existing customers, and this is what Schwanhausser predicts will blossom this year.

After all, connecting advertising to the deep demographic and financial information banks already have on customers is powerful marketing, he says.

Couple of issues here with respects to privacy and security... please Mr. Banker don't share my name with any of your 'partners.'

However as I have been telling some of my clients for a while now... the entire mobile banking landscape will succeed only through partnerships. Banks partnering with other service providers... (but to what extreme? And at what cost to the customer?).

A very important partnership is the one between those that provide services to the banks... Enterprise software providers, mobile app developers, system integrators - the best way to break in and go deep in mobile with a bank will be based on your partnerships with others. This is especially true for startups in the mobile space - go out and seek partnerships with providers who already have entrenched relationships with the big banks.