Forrester: How do the top U.S. banks rank in their mobile services?

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Peter Wannemacher

    Wannemacher 

Mobile is the new black: In 2011, the number of smartphone subscriptions in the U.S. grew by about 50 percent. Today, U.S. smartphone penetration is approximately 40 percent. This technological sea change is having an impact on the banking industry: In the past five years, U.S. mobile banking adoption has more than quadrupled, hitting 17 percent by the end of 2011. This represents a compound annual growth rate (CAGR) of more than 33 percent.

At Forrester, we predict this rapid growth will continue for years to come, putting mobile at the center of many customers' banking lives. In fact, one in 10 mobile bankers now use the mobile channel as their primary banking touchpoint--meaning they have not visited their bank's PC-based website in the past three months.

As such, executives and mobile strategists at banks are in a white-knuckle contest to out-do each other in the mobile space. This begs a very simple question: which firms are developing the best mobile strategies and building best-in-class mobile services?

To answer this question, and to take the pulse of the mobile banking market in the US, my team and I designed and applied our Forrester Mobile Banking Functionality Benchmark to the four largest retail banks in the U.S.: Bank of America, Chase, Citi and Wells Fargo. We found that these big U.S. banks offer solid, but not-yet-splendid, mobile services. In our inaugural ranking, the four largest U.S. banks posted an average score of 63 out of 100--above our minimum standards but far from perfect.

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The Highlights

  • Chase led the pack overall with an impressive 74 out of a possible 100. Chase received the highest overall score among the four banks we evaluated. The firm scored an impressive 90 in our accessibility category, which measures the different mobile touchpoints customers can use to access their accounts and make transactions. But the critical win for Chase came in the transactional functionality category, where Chase earned a score 26 points above the average. The strong showing results from a wide array of mobile money movement options--transfer functionality, mobile bill pay and the ability to add a payee, among others--as well as mobile remote deposit capture and other features like mobile peer-to-peer.
  • Citi is moving fastest when it comes to tablet banking. Multiple firms now offer some type of tablet offering to retail bank customers-- Bank of America's native iPad app includes a nifty interactive calendar of upcoming transactions. But only Citi earned a perfect score in our tablet category. In July 2011, Citibank officially launched its first-ever native tablet banking app for the iPad. Citi boldly chose to build the app "from scratch," and the result was an exceptional tablet banking offering with simple, intuitive task flows and integrated personal financial management (PFM) tools that were not available on the Citibank website at the time. Citi has recently expanded with a native app for the Kindle Fire.

The Lowlights

  • Banks must enhance their mobile acquisition and cross-selling efforts. Just one of the four banks we evaluated offered any type of product research or robust cross-selling on its native iPhone app, and none take full advantage of the mobile channel as a marketing and acquisition opportunity. For example, firms lack basic product information available directly on apps or mobile websites, let alone valuable cross-selling tools like loan calculators or contextual offers.
  • Banks have room to improve when it comes to positioning mobile within a broader cross-channel strategy. Cross-channel strategies are as vital to banks' success as mobile strategies. It's all well and good to develop great mobile services and strategies, but bank customers move across channels and touchpoints regularly. As such, strategists at banks need to plan for cross-channel transitions. The big U.S. banks have started to put mobile-driven cross-channel initiatives in place--Bank of America's branch appointment scheduler on its iPhone app is one example--but they will need to broaden the options available to users and ensure that transitions are clear and consistent.

What's does it mean?
Our research reveals strengths and weaknesses of banks' current mobile offerings. But, we're still very early in the evolution of mobile banking, and future innovations will have a colossal impact on banks and their customers. Some of these--such as mobile remote deposit capture and mobile person-to-person payments--are already available on some mobile banking apps, while others--such as mobile rewards redemption for cardholders or mobile wallets and in-store payments--have murkier futures. But mobile banking will continue to expand, and the sophistication of a bank's mobile offering will affect the firm's relationship with clients, differentiate the brand and impact the bank's bottom line.  

Analyst Peter Wannemacher covers eBusiness and Channel Strategies at Forrester Research.  You can follow him on Twitter @p_wannemacher. For more about the report, see Peter's blog.