Bank of America: Mobile Banking

Bank of America: Mobile Banking

A Case Analysis

Executive Summary & BOA’s Current Environment:

We find Bank of America at a pivotal point in their mobile banking strategy especially due to the fast and ever-changing mobile banking market which will largely effect Bank of America’s position within financial industry.  The organization needs to decide whether or not to add more functionality to their existing mobile app or develop new mobile apps targeted to various types of transactions.  This all comes at a time when the financial services industry is resurrecting itself after the 2007 housing market catastrophe.

Mobile technology is already changing the face of the banking industry, literally and figuratively.  As I have said many times before, we are increasing becoming a more and more impatient society.  We are demanding that routine services such as banking be something that we can do quickly and safely, that is the fast rule.  It must be efficient and secure; it should at best meet those two critical requirements.  Thankfully the banking industry, Bank of America included is aware of this and hence it is reshaping the way they do business and provide product and service offerings to its customers.  European countries adopted mobile banking technology much earlier than U.S. consumers, as mobile technology continues to grow so will the development of mobile banking applications by larger banks and even some smaller banks as well.

Clearly and as Bank of America discovered, mobile banking provides consumers with the convenience and ease of accessing of their various accounts; checking, savings, loans, money market, IRA, brokerage and the list goes on, this was one of the major drivers to their adoption of mobile (smartphone) banking .  The ability to access these accounts quickly via a mobile app allows consumers to complete transactions much more quickly than the traditional way.  Many customers haven't adopted mobile banking either because of security concerns or the need to do so doesn't exist for them.  When consumers were asked if they used mobile banking, the ones that do not use mobile banking said they prefer to complete banking transactions from their bank's standard website, over the phone (IVR) or in person; they feel more comfortable doing completing inquiries and transactions via those methods.  

I recommend that Bank of America approach their mobile banking strategy by focusing on two key elements; quality and security. Studies have shown that these two attributes are what consumers deem most important relative to mobile banking.  Quality provides the consumer with a degree of excellence when comparing the product or service to similar or like items provided by a competitor (i.e. JP Morgan, Wells Fargo, Citigroup, etc.) See Exhibit 2.  Improving the security of mobile banking technologies within the app is paramount to obtaining and maintaining consumer’s trust.  Building on these two elements does not come without certain costs and risks; the ultimate goal is to mitigate both while satisfying the strategy.