Part Two: Mobile Banking and the Future of Loyalty, An interview with Michael Hemsey and The Credit Union Times

May 10, 2013

Considering that the average cost per consumer transaction at a brick-and-mortar bank is $4 compared to just $.08 on a mobile device, banks should be strongly incentivized to convert more of their customers to the mobile channel. But how successful are they in that endeavor?

Kobie’s president, Michael Hemsey, believes banks can and should do a lot more. In the second of a three-part Q&A series based on an interview with the Credit Union Times, Michael reviews which industries are doing mobile well and how the banking sector can best emulate their success.

The question at hand is simple but critical: How can banks turn what is typically a 2-minute-or-less experience (a mobile banking transaction) and make it last 15 minutes or longer, driving engagement and newfound loyalty? 

mobile banking and loyalty programsWhat kind of industries are ahead of banks in term of mobile apps, and where can they look to learn?
From a social perspective the entertainment industry does rather well. Take movie theater apps. One of our clients does an excellent job incentivizing users to promote its brand. Consider the very specific use-case:  consumers see a movie. Then they post their ticket stubs on social media and provide reviews of the film, sharing them with friends. All the while they earn loyalty currency for doing so. Granted, bank experiences aren’t motion picture events, but the same social media engagement rules still apply. Imagine a Wells Fargo customer who has a great banking experience. Why shouldn’t that individual earn rewards via a loyalty program, promoting his or her experience and encouraging others to join?

The restaurant industry is also a mobile leader. Restaurants, of course, lend themselves to social experiences, starting with the fact that people like to take pictures of their food, who they’re dining with and where they’re eating. T.G.I. Fridays and BJ’s restaurants are strong examples of social integration and banks should follow their lead.

The telecom space is more challenging. People don’t think of their file or internet products the way they think about going to a restaurant. And yet companies like Verizon and Comcast would love to find a way to have that social integration work with their brand.

That said, existing bank app functionality is already solid. But more work is required. Mobile features like scanning and voice-activated questions and answers (like asking Siri where the nearest Wells Fargo ATM is) must be included.

Banks want customers to spend time on their app, but often the engagement lasts for as little as two minutes or less. Spending time on a mobile banking app is not like shopping on the Gap’s app. Your thoughts?
Given banking’s importance, you’d expect people would spend more time on mobile bank apps. But it comes down to how the information is presented. Does the app allow users to set spending goals? Does it let users pay bills (usually, that’s a given)? Does the app let the user receive offers based on their standing and relationship with the bank? Can they access mortgage information? Wealth management services? An auto loan, a credit card, a debit card?

Most banks have yet to take the mobile maturity step to make their app a place to spend 20 minutes and have fun.

Although 20 minutes might sound like a long time to be using a mobile banking app, the average American spends over two hours per day on actual mobile gaming. With that in mind, one-third of an hour doesn’t sound so hard to achieve. How else can other industries help banking reach these lofty mobile goals?

Stay tuned for the final discussion about Mobile Banking and the Future of Loyalty, where Michael Hemsey looks at the merits of a new financial management app, Mint, and how it can be further enhanced, driving ROI and consumer engagement.

Did you miss Part One of the Mobile Banking and the Future of Loyalty post?  If so, check it out here.