Is mobile the answer?

Mobile banking represents an alternative customer channel that could prove to be a key marketing tool of the future, writes Meridea CEO Jukka Riivari.

Forward-thinking retail banks have begun the adoption of mobile banking as an additional customer route into the bank. Incorporating state-of-the-art technology, mobile banking is easy to use, secure and can be accessed anytime, anywhere. It has the potential to reach affluent, tech-savvy existing and next-generation customers, and provides an ‘always on’ branding opportunity.

Standard Chartered Bank already offers mobile banking to its customers in Singapore, allowing them to check their balance, transfer money and pay bills. These customers can simply download the software provided by the bank onto a range of mobile devices.

It appeals to UK mobile users too. An October 2005 survey of 2127 frequent internet users in the UK by Forrester Custom Research revealed that 51 per cent of respondents were interested in mobile banking services and one in four would consider moving bank if a free mobile banking service was offered.
So, who are these 51 per cent and what drives them?

The survey highlighted a number of interesting areas: users under 35 had the greatest interest in mobile banking; 60 per cent already had the functionality required; heavy users – those spending more than £30 a month on mobile calls – were three times more interested in mobile banking; and nearly three-quarters of all the respondents had savings or deposit accounts.

Let’s take a closer look at the sub-35 segment. This group is unlikely to visit a branch office or respond to traditional marketing tactics such as direct mail, press adverts or telesales. But they are nonetheless a major and emerging set of customers, and banks need to find a way to reach them using tailored marketing strategies. They already have the tools for mobile banking and are familiar with mobile technology. They are not fazed by technological change; quite the reverse in fact – they actively seek out the latest, fastest and coolest technology. However, because they are just starting out, their earnings are relatively modest.
 
Mutual advantages

For consumers, the benefits of mobile banking are clear: there is no need to queue for service, it is secure and easy to use, and, because it can be accessed off-line (the user only has to connect to transfer the data to their bank), it is very low cost.

The benefits are equally compelling for banks. Mobile banking reduces the volume of customer calls, allowing the bank to focus on more complex, higher-value products such as pensions and mortgages. It also provides an alternative channel for users who prefer not to visit their branch and are not interested in telephone and internet banking. But it is more than that; it is like each user having their own personal bank branch in their pocket. As with all branches, it can be personalised to suit each user, though not all mobile banking providers offer this facility.
 
Marketing tool

Personalisation at this level presents a completely new set of marketing opportunities. The user is empowered and the service is unobtrusive. It allows organisations to better understand consumer buying behaviours and customise their offerings accordingly. In April 2005, Andrew Robertson, CEO of BBDO, the world’s third-largest advertising agency, stated that mobile marketing would replace TV as the most important medium for advertisers. In December, Coca-Cola UK marketing manager James Eadie told New Media Age that the mobile is potentially an even more powerful medium than TV. In fact, he believes that within a few decades Coca-Cola will be spending 50 per cent of its marketing budget on mobile marketing.
If it fulfils its potential, mobile banking could be a powerful marketing tool that changes the way retail banks do business. If the bank is in the user’s handset, it has the user’s permission to start a dialogue. Mobile banking becomes a dynamic marketing tool, nurturing the relationship between the bank and the consumer, while providing the latter with a useful, unobtrusive service.

Company profile

Meridea is a leading mobile and online self-service solution provider with extensive experience working with financial institutions. It was named one of the Red Herring Top 100 for 2005. For more information, visit www.meridea.com.