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Create a Competitive Advantage

By: Mike Griggs

As a community bank that serves both metropolitan and rural customers, Atlanta-based Community & Southern Bank consistently listens and responds to market trends and consumer feedback to develop products that offer value to every customer it serves — from a product offering of alternative financial services for underbanked consumers to a robust set of loan options that include senior housing lending.

With that in mind, the $2.6 billion asset bank recently introduced mobile deposits through the launch of a new smartphone application for iPhone, Android and BlackBerry devices.

In addition to initiating mobile deposits, the app allows customers to view and search account histories; transfer funds between accounts; pay bills; and access branch locations with driving directions.

Striking statistical insight made the app launch a high priority in 2012: An estimated 87 percent of the U.S. population owns a mobile phone, and 21 percent of those mobile phone owners use mobile banking, according to the Federal Reserve. Further, Javelin Strategy and Research predicts 111 million people will use mobile banking by 2016.

While trending statistics give insight into a bank’s customers, it is up to banks of all sizes to develop products and services that align with their constantly changing behaviors — even when it requires an initial investment.

Perceived Value vs. Integration Expenses

Businesses large and small want a clear indication of what returns to expect on their investments before taking on a new product or service launch. Mobile applications, especially those that integrate a mobile deposit feature, can present a significant investment in terms of time and money for community and regional banks.

From identifying, narrowing down and eventually partnering with an app development vendor to product implementation — as well as a full advertising and public relations launch to educate and inform customers — mounting costs can cause traditional community banks to shy away from venturing into mobile banking.

In addition, lines of internal questioning around value and perception (i.e., How much will customers use this service?) can prematurely deter the investment in a mobile app, especially when assumptions arise about the behavior of rural/older customers compared to urban/younger customers.

Customers who are in an older age bracket or located in more rural markets should not be dismissed as potential mobile banking customers. As an example, Facebook, the social networking site that has united the world one personal page at a time, was created for college students, but has since been adopted by millions despite age or location.

Also, Pew Research Center has found social network use among Internet users 50 and older has nearly doubled in the past year, and in the United States alone nearly 16 million people 55 and older use Facebook.

Increase Adoption (and ROI) Through Promotions

Community banks must take steps to enhance consumer understanding that translates to adoption and ROI. As Community & Southern Bank launched its app, for example, it paid special attention to educating its team members on its various functions and usability so that they could instruct customers on the basic usage of the app while touting security features.

To provide further understanding of how to navigate the app, it also held an in-branch promotion that encouraged customers to register for a free iPhone. Coupled with a press announcement, direct mail and both radio and billboard promotions, more than 200 customers downloaded the app on the first day.

If history sets precedence, adoption of new technologies can and will happen, even within multi-demographic customer bases and markets. A community bank that fails to recognize and invest in its customers’ changing behaviors will potentially lose business to those that do.

True Value: Competitiveness

The competitive landscape for any customer-driven industry — financial services included — has changed with the digital and now mobile revolution. Twenty years ago, a customer chose a bank based on his or her personal relationships with particular branch team members. Ten years ago, the lowest interest rate would solidify a loyal banking customer.

But now, the banking trend most attractive to today’s consumer is one that offers multiple service channels and enhanced product integration. Banks serve a society of hurried, on-the-go spenders and doers who expect offerings to be available whenever and however they want to access them.

By developing and integrating a mobile banking application, community and regional banks give their customers more than another choice, they also provide a channel that builds loyalty and proves they, like national financial institutions, move at the speed of today’s and tomorrow’s consumers.

Mobile: The Inevitable Future

The banking industry as a whole will continue to see customers make the transition to mobile banking. Mobile payments too will increase, and, as technology progresses, banking will one day see accounts opened via mobile devices, creating a “virtual branch” for an increasingly mobile-driven consumer.

Customers are pushing mobile banking services forward — beyond perceived market or demographic constraints. Financial institutions large and small must deliver, integrate, invest and continue to be innovative with what is trending to establish firm and profitable futures.

Mike Griggs is chief marketing officer at Community & Southern Bank, Atlanta.

Copyright (c) February 2013 by BankNews Media