On a cold morning in January 2010, Jen McDonald, head of Bank of America Corporation's (B of A) Digital Marketing group, walked briskly to the conference room to discuss the future of the bank's mobile strategy with Douglas Brown, senior vice president, Mobile Product Development, and David Carrel, senior vice president, Strategy and Analysis at Starcom, the company which the bank worked with for internet. Bof A launched mobile banking in May 2007, which allowed customers to access the bank through a mobile application (or app) on their smartphones, and through mobile web on their phone's browser. Brown, who was responsible for the development and launch of mobile banking, reported on the current status, "In less than three years we have four million mobile banking customers.
Brown was hesitant to make the bank's mobile app complex by adding more features. The added complexity could slow down the app and negatively affect user experience. He explained, "App comple xity has led to some high-profile failures in the marketplace. This carries a huge risk." It was also unclear if users were ready to sign up for mortgages or credit cards on their mobile phones. Carrel reminded them, "Don't forget that competitors view mobile as yet another platform to differentiate themselves. Just last month, Citi integrated credit card account information in its iPhone app. Citi customers can even track their credit card rewards on their mobile devices now."
Carrel floated a second option, "Why not create different apps for different target groups, say an app for Merrill Lynch brokerage, or for small business customers? Citi and Wells Fargo have done this, feeling they can provide users a more customized solution." (See Exhibit 1 for mobile banking apps for major players.) McDonald, Brown and Carrel agree that they have to come up with a new strategy on mobile banking.
Financial Services Industry
The U.S. financial services industry was fragmented, with...