SMS Text, mWeb or Downloadable App – Which Deserves the Crown?

We are in the process of finishing up our annual mobile banking vendor scorecard and we’ve seen some surprising findings come out of the process. One of the questions we asked vendors is: What is the average number of transactions per user per month (across the entire customer/channel base in the US) by mode? Answers varied by vendor but a pattern definitely emerged: In 2011, U.S. mobile banking vendors awarded the crown to the downloadable app based on average number of consumer transactions per month.

SMS text experienced the lowest consumer usage patterns, apps the highest, and mWeb fell somewhere in the middle. Using a straight average based on the numbers of vendors reporting, the mean number of transactions was 9 for SMS, 10 for mWeb and 15 for apps. If we tossed out the one vendor which reported the exact opposite of the other vendors as an outlier (this vendor experienced highest usage among SMS banking), averages would be 8 for SMS, 12 for mWeb and 16 for apps, or basically, an increase of 4-transactions for each mode.

But based on behavioral finance principles (and just plain old human behavior), habits are hard to break. The typical consumer has grown accustomed to accessing their bank accounts using online banking, thus, using a browser. When they use a mobile smartphone, their first instinct will be to try to access their banking in the same fashion. And Javelin data bears this out: more consumers access mobile banking via browsers than any other method. However, Javelin data also shows that consumers who use apps do more transactions on average. So what’s a bank or an FI to do? Javelin recommends first developing a mobile website as the most cost effective, comprehensive solution that will appeal to the greatest number of mobile bankers. Next, bring out a branded downloadable app geared toward optimizing the experience for smartphone users as they are the most prolific and stickiest bankers. But remember, most consumers don’t mobile browse or download apps yet. SMS text banking opens up mobile banking to all mobile phone users, not just smartphone users.  Do you see where this is going? Yes, Javelin continues to recommend the triple play approach of browser, text and application that lets the consumer select the method that is most convenient and easy to bank.

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