LAS VEGAS - It's increasingly difficult for financial institutions to connect with their customers and members. Changing demographics, pools and pockets of non-traditional banking/financial users, and the overwhelming need to be efficient and fast have pushed FIs outside their comfort zones and into a banking age with a number of unknowns. At least that's the way Richard Crone, founder of Crone Consulting LLC and a financial expert who's been closely watching the disruptive role the mobile channel is having on all aspects of daily routine.
During the opening day of BAI's annual Retail Delivery Conference & Expo in Vegas, Crone said the mobile channel is one so-called "disruptive technology" that is destined to forever change the financial landscape.
"Fifty-two percent of U.S. consumers surveyed by Visa USA say they want mobile-payments options," Crone said. "We see merchants making strides in efforts to create their own payments networks, through PayPal or ClairMail, for instance."
Banks, on the other hand, are lagging.
Crone pointed to one innovative payments provider based in Boulder, Colo., as an example. MocaPay, a somewhat abbreviated version of mobile cash payments, is facilitating payments through cell phones. MocaPay, formerly known as FEED, allows merchants and consumers to sign up for its mobile-payment service/platform, which charges the merchant 19 cents per transaction.
With a one-time PIN that must be used within 15 minutes of initiation, before it automatically becomes inactive, consumers pay for goods with their cell phones. Each user has a MocaPay account, similar to PayPal, which can hold a balance.
To date, MocaPay has 5,000 registered customers, Crone says.
"There is opportunity for banks in this market as well, from a prepaid perspective," Crone said. "There is opportunity to create decoupled prepaid mobile accounts, if banks are willing to make a move."
Banks in the space
While FIs have not yet reached the prepaid level Crone spoke of during his Tuesday presentation, a couple - Bank of America and Wells Fargo - are using the mobile channel to interact with and reach their customers.
For B of A, the mobile strategy is a relatively new one, says B of A's Doug Brown. The bank launched its mobile efforts in May, but it is seeing decent adoption rates. B of A is using the mobile channel as an additional arm, allowing customers to use their cell phones to enroll in special services.
Wells, which did not sit on the panel, was touted by Crone for using the mobile channel to send out text-message alerts to its customers. The bank also is promoting its mobile offering in advertising campaigns.
"These alerts can save the bank a lot of time and energy," Crone said. "Instead of having a customer call in to check a balance, you could send them an alert to their phone when their balance is low. You allow the customer to choose their preferences (for the alerts) online and then you manage the alerts."
To that end, Crone said until FIs start collecting meaningful information from their customers and members, such as cell-phone numbers and cell-phone carriers, they aren't likely to make much headway in the mobile space - and will continue to trail the strides retailers are making.
(Read also, Mobile tech and the ATM and coverage from last month's ATM, Debit & Prepaid Forum.)
