App Your Service

Three community bankers sketch their steps in successfully developing and launching mobile banking apps

By Tam Harbert

It’s no secret that smartphones are widely used: Just look around. Statistics support our everyday observations. More than half of all Americans use a smartphone, according to the Pew Research Center.

It’s no wonder that many community banks are sprinting to develop their own apps for mobile banking, which are typically the most versatile and user-friendly way for smartphone users to engage in mobile. According to ICBA’s 2012 Technology Survey, 37 percent of community banks already were offering some kind of mobile banking service, and another 44 percent were planning to offer one by next year.

So if your community bank is among that 44 percent, where does it start in planning to offer mobile service? What are the most important considerations in developing a mobile banking app?

Based on interviews with three community bankers who helped their banks develop and launch a mobile banking app, here’s a short guide to the process that includes tips on how to build a cost-effective, useful mobile app that engages your customers and burnishes your bank’s brand.

Step 1: Choosing your vendor

None of the community bankers we interviewed did it alone—they all used outside vendors to help develop their mobile app. “In general, it’s probably not realistic for community banks to spend the money and human capital it would take to develop their own app,” says Joshua Everton, vice president and eSolutions manager at Bank of American Fork in American Fork, Utah, which has $950 million in assets.

Third-party providers offer very good “out-of-the-box” applications, Everton says. They have the expertise and experience to bring an app to market more quickly—and less expensively—than a bank doing it by itself, he notes.

Everton estimates that developing a mobile app independently would cost tens of thousands of dollars, which might not even include testing. On the other hand, an out-of-the-box solution generally costs less than $10,000 and could be as low as $5,000, he says. What’s more, the vendor should maintain and update the app as new phones and operating system versions come out, something which—given the breakneck pace of changes in the smartphone market—would be time-consuming and complicated for a community bank to handle.

You can start by narrowing down your choices of mobile banking app providers by looking at which vendors are compatible with your bank’s core processing system. Or, some community banks decide to work directly with their core vendor.

That’s what First Advantage Bank in Clarksville, Tenn., did. The $385 million-asset bank’s core provider has both a “canned option and a custom option for mobile solutions,” says Cindy Smith, the bank’s executive vice president, chief marketing and delivery channels officer.

First Advantage Bank chose the custom route through its core processor “because we wanted more control to design something, especially for our customers,” Smith adds.

Farmers State Bank in Munith, Mich., took the same route by selecting its core processor to develop its mobile banking app. Its core processor already provided the $60 million-asset bank’s online banking platform, so adding mobile services that included a mobile app through the same company was a relatively simple upgrade, says Laurie Goodlock, Farmers State Bank’s director of marketing.

Bank of American Fork chose a small, independent vendor, MEA Financial Enterprises LLC in Monett, Mo., which Everton discovered at a national user group meeting of the bank’s core processor. “There are lots of neat products out there, and we looked at a couple of dozen different vendors,” he says.

But Everton says he favored MEA Financial Enterprises because the company was small, nimble and flexible enough to do a custom design that “didn’t look just like everyone else’s product.” As he evaluated app developers, he also looked for good security, the ability to incorporate Bank of American Fork’s branding and a long-range mobile vision.

Everton says he evaluated mobile apps that vendors had built for other community banks, and he carefully checked references. He also went a step further, checking the reviews that these apps got in Apple’s App Store and Google Play.

“That gives you another angle from which to judge the vendors,” he says. “If the customers hate the app, that’s a really big problem.”

Step 2: Developing your app

The choices of mobile banking platforms and features may depend at least partly on the vendor you choose. With Farmers State Bank’s core processor “there wasn’t a lot of choice,” but the package offered everything the bank needed, Goodlock says.

The mobile banking package Farmers State Bank chose included support for Android, iOS and the newer BlackBerry smartphones. It also provided an app for iPads, which was important for the bank’s customers who wanted to use tablets for their online banking.

In fact, that tablet-compatibility issue with online banking was what prompted Farmers State Bank’s senior management to move ahead with mobile banking, Goodlock says.

MEA Financial Enterprises offered the flexibility to incorporate features and design elements that would reflect Bank of American Fork’s corporate logo and other branding features. “Our brand promise is ‘big city banking, small town service,’” Everton points out. Customers value the accessibility, friendliness and helpfulness of the bank’s staff, which Everton wanted to shine through in its mobile banking app.

The customization of Bank of American Fork’s app includes a button that directly dials the bank if a mobile customer needs help. “We don’t want to discourage [customers] from coming to the branch, so with our technology we make it easy to talk to us if you need to,” Everton adds.

The app also includes contacts and driving directions for all branch locations and a function that searches nationwide for fee-free ATMs. “We really wanted to make sure we were keeping our brand promise,” Everton says. “We’re bridging that gap between the digital frontier and good old branch customer service.”

Bank of American Fork’s new iPad app, which was on track to debut this past summer, incorporates live chat, a feature Everton says eventually might be incorporated in the smartphone app as well. More standard banking functions included in this app allow customers to access to their account statements and transactions, pay bills, transfer funds between accounts and view check images.

First Advantage Bank’s mobile banking app is part of a mobile service suite, called FAB Mobile Banking, which includes mobile texting and a mobile Web browser. The app handles bill pay, checking account balances and histories, transferring funds between accounts, and finding bank locations and ATMs. Farmers State Bank’s mobile banking access allows for checking account balances and making funding transfers.

Everton encourages community banks to incorporate special features to make their mobile banking apps their own. A community bank serving a rural marketplace with a lot of agricultural business might consider incorporating commodity market prices or weather information. Or, a community bank in a college town might build the university’s sports schedule into the app.

“Even a community bank with an out-of-the-box product can do that type of thing,” he says. “It just needs to know what’s important to its customers.”

Everton also recommends paying special attention to the app’s artwork and description. Remember, the icon is the first part of your bank’s app that consumers see, Everton says. “It’s a little thing, but it’s worth investing time to make it nice so that it gets noticed in the sea of app icons.”

A bank’s mobile banking description in the app store also needs to be concise, specific and clear, Everton says, like an “elevator pitch.”

Step 3: Testing your app

All three community banks ICBA Independent Banker interviewed tested their mobile banking app internally for at least 30 days before rolling it out to customers.

First Advantage Bank tested its app among employees, family, friends and a few select customers for 45 days. The bank invited customers who had posted on social media or contacted the bank directly to suggest that the bank offer a mobile app.

Virtually all of the First Advantage Bank’s staff members have iPhones, so the bank bought Android phones for people in its call center and in marketing so they could test the app on those devices. The 45-day test period served not only to discover potential glitches, but it also gave the staff time to learn how the app worked and allowed them to become enthusiastic in telling and teaching customers about it.

“Once employees got excited, it was easy to share their stories and excitement with the customers,” Smith says. “That was one of the best moves we could have made.”

Step 4: Launching your app

Build excitement for your community bank’s new mobile banking app by promoting it selectively as launch date approaches, Everton says. Bank of American Fork focused its initial marketing of its new app on customers who were already using the bank’s online banking portal. Those customers, he explains, are also the most likely group to adopt mobile banking.

“We plastered our website with mobile banking ads. We did Facebook and Twitter,” he says. “And we had good downloads from day one.”

Smith notes that it’s important to measure adoption and usage of the app. In addition to the smartphone app, First Advantage Bank launched a texting function for customers without smartphones. The bank receives data from its core processor on both. Since the launch of the bank’s mobile banking app last February, 60 percent of all its customers with checking and savings accounts have used mobile banking.

After launching its app, Bank of American Fork watched social media carefully for customer feedback. It saw very few problems, but when comments did pop up on social media, the bank immediately addressed them.

Despite extensive testing before its app launch, Bank of American Fork encountered a couple of issues with the Android interface, Everton says. “The problem with Android is that there are so many different flavors of the operating system and so many different phones that it’s almost impossible to cover them all.”

Future steps

The entire process of developing a mobile banking app, once you’ve selected a vendor and made the commitment, is fairly quick—about three to four months, the three community banks report. And already these banks are looking to expand their mobile banking features.

First Advantage Bank is preparing to implement remote deposit capture and also plans to launch an app for tablets. Bank of American Fork is investigating how it might use texting on phones.

Whatever further actions their community banks take next in mobile banking, Goodlock, Everton and Smith say they’ll be guided by how customers use current apps and what features they request. “It would be easy to just develop all these things that we thought would be really cool, but if the customer doesn’t have an interest in it, it’s really a waste,” Smith says.


Tam Harbert is a writer in Rockville, Md.

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