Inside Bank of America’s mobile-financing strategy for small businesses

No matter how easy or even pleasant technology makes everyday tasks, people will always want at least the option to call on human help. That’s the Bank of America perspective.

“They’re complementary, one doesn’t exclude the other,” said Sharon Miller, head of small business banking. “I go online and I’ll research and look at the information, but when it comes to getting the advice, looking for a loan, getting someone to tell me what I need to think about — I want to talk to someone… That’s what the basis of our company is built on. Our people make the difference.”

That’s coming from perhaps one of the most progressive of the major U.S. banks when it comes to digital strategy. It’s been one of the most aggressive in reducing its branch presence, it was among the first to upgrade its ATM fleet with new technology to giving customers greater choice of transaction type (like check cashing, making credit card payments, choosing their preferred denominations when withdrawing cash) and last year it was the first to deploy cardless ATM capability. On mobile it was ahead of the digital game with Touch ID, debit card toggling and fraud alerts to the app.

In another move on Wednesday, it upgraded the app to allow small business customers to apply for a loan or credit line directly from the app, making it a front runner in a market where most banks have yet to perfect their most basic mobile banking strategies for consumers, let alone those for corporate or small business customers, or even make in-branch or online banking functions just as easy to execute on mobile. As part of the app upgrade it’s also giving small business customers a loan product tool that helps them find the right loan for their needs, monthly loan payment calculator and the ability to connect with the bank’s small business specialists through online chat, phone or by scheduling an in-person appointment with a small business banker through their phone.

It’s really just another step toward the bank’s overall vision of making every banking experience the same across channels, according to Miller, by combining technology and customer service.

With 23 million active mobile users, B of A reported a 38 percent increase in sales over mobile over the last year. More than 1.3 million of them are small business clients and the bank says the number of small business customers using the mobile banking app has increased 14 percent in the last year.

“Our technology is there to help us keep up with everything happening in the world and the things consumers are demanding, but no matter how you slice it, there’s a reason we have 4,600 financial centers across the country and 2,000 people dedicated to small business across the country,” Miller said. “Thats the differentiator of us versus fintech or a community bank: we have size and scale to make it relevant, but we also operate in 87 different local markets with people that make local decisions and operate in those local counties.”

Listening to what takes place in those conversations, as well as feedback from online channels and customer surveys, has been “the key” to B of A’s digital success, Miller said when asked about how the bank came to identify the new feature as a need among its small business customers.

“We aren’t based on one product or one service, we start with the client and the difference between us and a fintech is our ability to have that local conversation,” she said. “We want to have the conversation that cant be replaced by just a product.”

She mentioned the forthcoming launch of its digital assistant erica later this year, which will provide a voice simulation to help clients with their banking. Still, not even erica can replace the value of a human banker for B of A. Banking is, after all, about people — and people are all different in their needs, preferences and capabilities.

Sometimes consumers need things individually that a small business owner doesn’t, and vice versa, Miller said, but all small business owners are also consumers, and she wants to make their banking experience seamless no matter what hat they’re wearing.

“Small business clients have different priorities. They could be starting a business, growing it, transitioning… All of those stages require different skill sets. They’re partnering with us to have that thoughtful discussion and get the right solution. Nothing just fits perfectly. Everyones different.”

Bank bots, move over: BNP Paribas is putting human advice before robots

BNP Paribas is rolling out a new digital investment tool — one where the advice is written entirely by humans.

It’s a departure from most of the new digital advice offerings that have emerged in the last couple of years; it’s not a robo-adviser — it’s not even a robot-human hybrid. It’s just a core service for the French banking giant’s high-net-worth clients brought to the mobile device. It might seem a little behind the times, but banks generally don’t apply new technologies to old services overnight, and that sort of caution is particularly applicable to BNP.

The new offering from BNP, called myAdvisory, offers message-based financial advice through the bank’s mobile app, based on clients’ portfolio and risk preferences, financial recommendations as frequently as the client allows and a chat-based trading platform. BNP is at the beginning of a slow rollout, beginning with the clients who provided the feedback on which it built the offering.

The bank has a system that monitors market activity and alerts a team of advisers when something happens that might have a significant on a client’s account, said Salvador Vidal, global head of products and services marketing for BNP’s wealth management unit. Those advisers then send that information to a team of relationship managers, who then message the affected clients, deliver that information and ask: Do you want to follow this advice?

“We’re monitoring and learning from the [customer] usage what kind of channel they prefer, when they prefer it. … We have a very open approach to that,” Vidal said. “We don’t want to take steps and force an offering on clients who don’t want it. We’re committed to co-creating products for clients, giving them those tools and, as they use those tools, making them evolve to fit their needs.”

That’s why while legacy banks and startups alike are rolling out artificial-intelligence-powered robots that dole out algorithmically created investment advice or AI-powered chatbots. BNP is just giving clients anytime-anywhere access to a human adviser. It doesn’t currently offer a robo service but has not ruled out future plans to do so.

Just as the mobile device truly disrupted the client experience in basic banking and gave customers “the mobile banking experience,” wealth management services should be following that path, said April Rudin, chief executive of wealth management marketing firm The Rudin Group.

“This is mobile wealth management, and I think that doesn’t exist,” she said. “Most wealth management and financial services firms don’t mimic and break out the client experiences like a luxury brand does. This is really an upset to the client experience and demonstrates that BNP has changed the experience instead of changing the products or services they offer.”

Citi actually revealed a mobile-first retail banking experience in December for its Citigold credit card members (clients with qualifying balances of at least $200,000) that includes access to investment with a click-to-call button for immediate access to their financial advisers. It’s not a messaging-based service like BNP’s though.

But the focus is the same: high-net-worth clients are global, mobile and want to talk to an adviser when they want to. Some want a self-service model – a robo-adviser – but probably not for their entire portfolio, and existing wealth management firms are so paper-oriented they can feel a little clumsy or antiquated compared to the smooth, fast digital experiences customers are used to today. That’s the experience BNP is trying to change.

“One thing we share with the luxury industry is the clients; we have the same clients. We’re aiming to transform the experience we give them so they understand we are what we are, which is also a luxury brand. That’s the reason why we launched this whole solution.”

Bain’s Gerard du Toit: 30 percent of banking customers buy products from competitors

Something curious just popped up on our inevitable march toward mobile banking: adoption kind of hit a wall.

Sure, a lot of early adopters are comfortable using their smartphones to transact but seems an older demographic just isn’t taking to digital channels as much. Is it them or is it the fact that banks haven’t found the right formula to serve them yet?

We’re going to get to the bottom of these trends with our guest this week on the Tradestreaming Podcast, Bain’s Gerard du Toit. He leads the consulting firm’s banking practice in North America as well as the firm’s customer experience products globally. At the intersection of those two specialities, Gerard spearheads the firm’s research into customer loyalty in retail banking.

The global 2016 version of Bain’s Customer Loyalty in Retail Banking report forms the basis for much of our discussion today. Here’s the report.

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Below are highlights, edited for clarity, from the episode.

Mobile banking leveling off

Mobile banking has seen a massive upswing globally as customers have rushed to use their mobile devices for banking. But, it’s now leveling off. The adoption of mobile banking is plateauing in many markets. So, the progress going forward is going to take harder work to get the rest of the population banking on mobile. While most new technologies go through an S-curve and plateau at a certain point, this happened sooner than we expected.

For banks, the cost saving opportunity of moving to mobile is significant. It costs $4 to $5 dollars for an in-branch teller transaction where a mobile transaction costs just a few cents. It’s also a much better experience for customers — it’s anywhere, anytime, and you don’t need to stand in line.

Adoption rates for mobile banking are very high in the younger generation. But for older customers, even though they’re very active banking online, the switch to mobile is taking a bit longer.

The Netherlands as model for mobile banking

The Netherlands, the Nordics, and some of the northern European countries are further ahead in mobile adoption and taking some of the volume out of the branch. The government’s push to get rid of cash and paper has aided the Netherlands in its move to mobile banking. They’re further in electronic payments and use checks infrequently.

They’ve also just made mobile banking easy and straightforward, and they teach customers how to bank on a device. So, they’ve built policies and processes around mobile adoption.

In the U.S., we have the UI down pretty well. But we’re behind in policy. For example, if I want to deposit a check from my phone, I can do it but it still takes a day or so before my money is available. I’m still limited by how much I can deposit via remote deposit capture. There’s a limit in how much I can deposit like this in aggregate during the month.

Even younger customers, who are more inclined to do mobile banking, visit the branches as much as older customers do. The difference is that they try mobile or digital first, before taking a trip into their bank. Eliminating digital fails caused by upstream policies and teaching older customers how to get comfortable banking on mobile is the one-two punch to get markets that are behind to the levels that the leaders are around the world.

Customers are cheating on their banks

Hidden defection occurs when a customer leaves his current account with a bank but buys a new banking product from a competitor. Our research found that in the U.S., about a third of bank customers take their business elsewhere every year. This is a striking and important opportunity for banks to go after.

In the U.S., people generally buy a new financial product every two years. But less than half the time do they buy that product from their primary bank. This is clear evidence of a lack of loyalty. The primary bank should have an advantage: they have the customer already, they know something about him, they should be able to pre-approve a product and offer a better overall rate. But they don’t. It’s even worse — primary banks are disproportionately losing the battle for more profitable products like loans.

 

E*Trade rolls out Android app, gears up for big push in mobile

crowdfunding

E*Trade announced the launch of a mobile application — the E*Trade Mobile Pro for Android.

E*Trade account holders can

  • View real-time streaming stock and options quotes
  • Access real-time news and information
  • Trade stocks during regular market and extended hours sessions
  • View orders, alerts, news, charts, watchlists, and portfolios
  • View a “Complete View” of all E*TRADE brokerage and bank accounts

This app launch for Android rounds out E*Trade’s mobile applications which include products for iPhone and Blackberry.  As of November 2010, customers have moved close to $1billion dollars via E*TRADE Mobile Pro since its launch.Like E*Trade, the brokers seem to be focused on continuing to push out offerings for mobile.