Mobile Banking: The Right Channel for Right Channeling

My presentation tomorrow on Right Channeling

I’m in Miami — yeah, life is tough — for the 7th Annual Mobile Banking and Commerce Summit. Tomorrow afternoon I’ll speak on mobile banking as it applies to Right Channeling. Presenting with me will be Michael J. McEvoy, managing director at ATH Power Consulting.

“Right Channeling” is the art and science of handling customer inquiries so that each customer lands in a channel best suited to her or him. I picked up the term from Ron Shevlin, senior analyst at Aite Group, whose championing of it has made Right Channeling more or less a household word among informed bankers.

Mobile banking is the fast-growing channel in bank history. Indeed, the medium has taken on a life of its own. Thirty percent of bank clients use mobile banking two or three times per week, 14 percent use it daily, and 4 percent use it several times each day. Small business owners “check in” on their accounts more often than retail clients do. Not surprisingly, data suggest that those who access their banking data online most often tend to be highest-value clients.

Besides the fastest-growing, mobile also happens to be the lowest cost channel in bank history. Want more good news? Retail and small business clients alike indicate a willingness to pay for mobile banking services. Here is a clear opportunity to provide better service based on what clients truly want, and — for once — not have to give it away.

Right now mobile makes up 7.5 percent of the current bank channel mix. By year-end we expect that to rise to 12.5 percent, and continue to climb from there.

No wonder! Clients can do more with mobile than with any other channel — pay bills, deposit, analyze and manage, open accounts, send or transfer funds, pay at point of sale, and more. Annual revenues to a bank per user from all of these activities are currently estimated at $98. That means we can afford to continue to develop this medium and its power to serve our clients. In fact, we can’t afford not to.

Banks have a great opportunity to be proactive here. I’ll close my presentation tomorrow with these three suggestions for banks:

• Leverage our position of trust with clients to make mobile money a seamless part of daily life;

• Extend loyalty strategies to enhance clients’ shopping experience;

• Collaborate with merchants, mCommerce players and new intermediaries to provide a seamless, painless customer experience that “works out of the box.”

If you’re in Miami for the conference, please find me and say hello. After the conference, I’ll post some thoughts about it here.

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