Kent McNeil Kent McNeil Principal - DonRiver

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Mobile Banking - It deserves its own strategy

  • I recently finished compiling a mobile banking vendor assessment at a client’s request.

    After we looked at the results we reexamined their mobile banking strategy, having a long-term plan is the only way to select the proper mobile banking solution.   

    Why do I say that??  Because complimentary offerings vs. basic banking features and which or how many communications protocols will be utilized are critical before selecting a mobile banking vendor solution.   And those are the easier decisions to make.

    To set the stage and look at a few of the decisions that need to be made, let’s look to ABI Research which recently ranked/rated mobile banking vendors and the criteria used in their rankings.

    ABI Research Ranking Criteria


    The seven categories are:
    1)    Bank relationships (both the relative size and number of banks they have relationships with)
    2)    MNO relationships (both the relative size and number they have relationships with)
    3)    Solution breadth (does the vendor offer solutions by SMS, mobile Internet, and mobile application
    4)    Complementary products (products related to mobile banking that a prospect might be interested in, such as domestic p-to-p, mobile top-up, mobile international remittance, bill pay, mobile commerce, etc.
    5)    Partnerships (distribution partners beyond banks or MNOs, such as device manufacturers, IT companies, etc.)
    6)    Financial and organizational health
    7)    Supporting products and services (products and services that facilitate mobile banking so the company does not need to partner [provides some cost and information advantage such as an SMS gateway, GRX, or integration services]).

    The three categories are:

    1)    SMS -- Functionality and Security
    2)    Mobile Internet -Functionality and Security
    3)    Mobile Applications – Functionality and Security.

    Although I did not utilize the ABI report for my vendor assessment I think the criteria is a good benchmark when evaluating mobile banking vendors.

    So do you just pick the winner and go?  Or maybe you select the most cost effective of the top 5?   Issue an RFP to the top three?  

    Features are relatively irrelevant from a vendor software solution standpoint or put another way they are identical for all vendor solutions.   Any features your financial institution provides to its online banking customers can be delivered via the mobile.  It is very difficult to select one vendor over another because they can extend your online services to the mobile.

    Features being equal do you focus on what is likely the biggest concern?  Security.

    Security is first on consumer’s minds and financials institutions as well but how secure the solution is or needs to be really depends on the mobile banking strategy.  

    If you are using SMS for example you will have very different security concerns than a downloadable application.  Also, if information is stored on the phone, the security strategy becomes much different for solutions that do not store information on the phone (USSD for example).

    Triple play is a buzz word (SMS, Mobile browser and downloadable application) or quad play (SMS, USSD, Mobile browser and downloadable application) for mobile banking.   Is it good that a solution can offer all these access channels to your customers?  

    That depends on if you are prepared for the maintenance and customer support that will be required to support each.   Not to mention, each will have its own security issues, implementation cost, technology issues, customer education, etc.

    If your organization is ready is the customer ready?  In the geography you operate, customers may have limited exposure (if at all) to USSD for example or have limited experience with downloading applications to phones.  So maybe SMS is the right answer or focusing on Smartphone’s such as the iPhone and Blackberry?

    Arguably the quickest and easiest way to offer mobile banking is via WAP and a mobile browser.   Even this requires a marketing strategy, support and customer education.  Again, first you would need to understand if mobile browser would work for your current customer base.   Are data services common where your financial institution operates?  Is it expensive for customers to use?

    The complexities keep growing if you do not put some forks in the road early and often.   To confuse things a bit more, the mobile banking vendors are in 'partner mode' at the moment so identifying a clear strategy is key to investing in technologies that will work for all your customers.

    Considering it is cheap for banks and other financial institutions to support when compared to other channels such as call centers and more and more customers are expecting their banks to offer it, mobile banking is here to stay.

    Putting the long-term plan in place early will allow your mobile banking offering to grow properly over time with limited investment risk. 


    Kent McNeil
    About Kent McNeil Kent McNeil works as Principal at DonRiver
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1 comment
  • Nicolaj Aaröe
    Nicolaj Aaröe Hi Kent,
    Thank you for an interesting article.
    My area in the mobile payment world is to develop coverage for fraud detection and tracking (from a mobile operator point of view).
    What have you discovered so far in terms of the risk involved? more
    October 29, 2009