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Syndicated Sample Report 2010 Mobile Banking Scorecard – Shift in Smartphone Ownership Calls for a Shift in Focus: How 19 Top Financial Institutions Compare on Mobile Channel Retail Delivery Aug u st 2 010 T +1 925 225 9100 ∙ F +1 925 225 9101 ∙ 4301 Hacienda Dr. ∙ Pleasanton, CA 94588 USA ∙ inquiry@javelinstrategy.com ∙ www.javelinstrategy.com Syndicated Sample Report 2010 Mobile Banking Scorecard – Shift in Smartphone Ownership Calls for a Shift in Focus: How 19 Top Financial Institutions Compare on Mobile Channel Retail Delivery Audience: Overview Financial institutions: mobile banking, marketing groups, mobile banking vendors, mobile network operators Authors: Mark Schwanhausser, Senior Analyst, Multichannel Financial Services Mary Monahan, Managing Partner and Research Director Contributors: covered five key areas of mobile banking: marketing and security messaging, mobile access, general features, short message service (SMS) features and security. As part of the data collection process, mystery shoppers also were employed. They searched each FI’s website and contacted Alan Raby, Consultant, Mobile John Kenderski, Associate Analyst James Van Dyke, President and Founder Publication Date: Price: Length: mobile banking services offered by 19 of the 30 largest U.S. financial institutions (FIs) based on deposits. The survey For the 2010 Javelin Mobile Banking Scorecard, we examined August 2010 $2,000 each FI’s customer service representatives (CSRs) a minimum of four times. Of the 30 FIs researched and contacted in June and July 2010, 19 offer mobile banking services to their customers. When scoring the FIs, Javelin reviewed a total of 47 criteria. Based on a quantitative analysis of the criteria, FIs were awarded either a gold, silver or bronze status. This report further includes a profile of Bank of America. ► 43 pages ► 35 charts/graphs Primary Questions •
What products and services for mobile banking are banks offering, and how have they changed over the past year? •
Which banks provide the most complete mobile banking offerings? •
How do the features offered by banks score based on the criteria used by Javelin? •
Who are the industry leaders in mobile banking? •
What is the future of mobile banking? T +1 925 225 9100 ∙ F +1 925 225 9101 ∙ 4301 Hacienda Dr. ∙ Pleasanton, CA 94588 USA ∙ inquiry@javelinstrategy.com ∙ www.javelinstrategy.com Syndicated Sample Report 2010 Mobile Banking Scorecard – Shift in Smartphone Ownership Calls for a Shift in Focus: How 19 Top Financial Institutions Compare on Mobile Channel Retail Delivery Methodology In order to assign a quantifiable score to a financial institution’s (FI’s) mobile offering, Javelin employed the following methodology: We reviewed the FI’s website to ascertain if the FI offered mobile banking and used the five criteria outlined on the following pages to score the FI. Additionally, researchers employing mystery‐shopper techniques contacted each FI’s call centers to determine whether or not the FI offered mobile banking. Each FI was contacted a minimum four times by the researchers to determine the customer service representatives’ (CSRs’) knowledge of mobile banking as well as the quality of the answers received. During calls, researchers recorded CSRs’ responses. We used this methodology because these sources are the primary ones available to an FI’s customer or to the general public looking for information on a product or service offered by an FI. Data was collected for this report from June to July 2010. The research initially focused on the top 30 U.S. FIs by deposit base. After reviewing their websites, the researchers narrowed their efforts to the 19 FIs found to offer mobile banking services. Interestingly, in our 2009 Javelin Mobile Banking Scorecard, which was published in October 2009, we reported that only 18 of the top 40 FIs offered consumer‐facing, full‐functioning mobile banking services as of July 2009. One year later, 19 of the top 30 U.S. FIs by deposit size offered consumer‐facing mobile banking services. For the 19 FIs reviewed in this report, two research analysts using mystery‐shopper techniques called the CSRs in mobile, online or general customer service a minimum of four times, requesting an experienced mobile CSR. The CSRs’ names were recorded, as were the dates and times of the calls. During a call, research analysts used the criteria outlined in the following sections to grade the quality and depth of the mobile banking service offered by the FI as well as the CSR’s knowledge of the service. Detail pertaining to the five main criteria that were used by the research analysts follows. Marketing and Security Messaging FIs were graded on their marketing and security section according to how well their mobile offerings were marketed based on the criteria in Figure 1. The maximum number of points an FI could score for marketing and security messaging is 15. FI’s Were Judged Against 5 Marketing & Security Messaging Criteria Figure 1: Marketing and Security Scoring Criteria Marketing & Security Message Mobile banking found on home page Mobile banking found in the bank's search engine Security messaging about mobile banking on the website Marketing messaging on mobile banking website Specific mobile department T +1 925 225 9100 ∙ F +1 925 225 9101 ∙ 4301 Hacienda Dr. ∙ Pleasanton, CA 94588 USA ∙ inquiry@javelinstrategy.com ∙ www.javelinstrategy.com Syndicated Sample Report 2010 Mobile Banking Scorecard – Shift in Smartphone Ownership Calls for a Shift in Focus: How 19 Top Financial Institutions Compare on Mobile Channel Retail Delivery Mobile Access Figure 2 provides an overview of the criteria we used to rank an FI’s mobile access modes. A total of 30 points were allocated for this section. In Javelin’s 2010 Mobile Banking Vendor Analysis, we stressed the need for FIs to offer all three modes of access to their customers because FIs cannot control the type of handset consumers will own or the way they will access data via a mobile device. Access will continue to play an important role for mobile banking in the foreseeable future, given the rate of innovation in the consumer electronics segment, with an emphasis on mobile devices. For instance, consumer demand is strong for the Apple iPad released on April 3, 2010, and the Apple iPhone 4, released on June 24, 2010. Therefore, prudent FIs will begin to develop applications for them. This report further articulates the need for FIs to begin focusing on other mobile platforms, such as the Android. FI’s Were Judged Against 10 Mobile Access Criteria Figure 2: Mobile Access Scoring Criteria Mobile Access SMS/text message banking Browser‐based .mobi or .wap site Shortcut or link to the .mobi site Embedded application Smartphone app from the app store: iPhone iPad BlackBerry Android Other [specify] Mobile banking triple play T +1 925 225 9100 ∙ F +1 925 225 9101 ∙ 4301 Hacienda Dr. ∙ Pleasanton, CA 94588 USA ∙ inquiry@javelinstrategy.com ∙ www.javelinstrategy.com Syndicated Sample Report 2010 Mobile Banking Scorecard – Shift in Smartphone Ownership Calls for a Shift in Focus: How 19 Top Financial Institutions Compare on Mobile Channel Retail Delivery General Features FIs were ranked on 17 general and 13 SMS features, which were awarded a total of 43 points. These features may be divided into “monitoring” (for example, checking balances and viewing recent transactions); “money movement” (which includes transferring funds between accounts); and more “advanced capabilities” (such as opening accounts and enrolling via a mobile device). For this report we also included “bilingual mobile websites or text messaging” because many U.S. users of mobile financial services (MFS) are either Hispanic or Asian, and English may be a second language for them. An FI located in a market that has many Hispanics would be wise to offer its mobile service in Spanish as well. FI’s Were Judged Against 17 General Mobile Banking Features Figure 3: Scoring Criteria for General Features Features Check balances (DDA) View recent transactions (DDA) Check balances (credit card) View recent transactions (credit card) Check balances (savings) View ANY other account Pay bills Transfer funds between your accounts intra‐bank Transfer funds between FIs to your own accounts Transfer funds between customers at same FI Transfer funds between FIs between customers Mobile remote deposit capture ATM/ branch locator Open accounts over mobile phone Enroll using your mobile phone View current rates Bilingual mobile web site or app T +1 925 225 9100 ∙ F +1 925 225 9101 ∙ 4301 Hacienda Dr. ∙ Pleasanton, CA 94588 USA ∙ inquiry@javelinstrategy.com ∙ www.javelinstrategy.com Syndicated Sample Report 2010 Mobile Banking Scorecard – Shift in Smartphone Ownership Calls for a Shift in Focus: How 19 Top Financial Institutions Compare on Mobile Channel Retail Delivery SMS Features In addition to evaluating FIs against general mobile banking criteria, we further examined a FIs SMS/text banking functionality as well. Figure 4 lists the categories for which Javelin judged FIs on SMS/text features. FI’s Were Judged Against 13 SMS Features Figure 4: Scoring Criteria for SMS Features SMS Features Check balances (DDA) View recent transactions (DDA) Check balances (credit card) View recent transactions (credit card) Check balances (savings) View recent transactions (savings) View any other account View payment due SMS/text message alerts Financial two‐way alerts (actionable) alert SMS text person to person transfer Bilingual text messaging Other T +1 925 225 9100 ∙ F +1 925 225 9101 ∙ 4301 Hacienda Dr. ∙ Pleasanton, CA 94588 USA ∙ inquiry@javelinstrategy.com ∙ www.javelinstrategy.com Syndicated Sample Report 2010 Mobile Banking Scorecard – Shift in Smartphone Ownership Calls for a Shift in Focus: How 19 Top Financial Institutions Compare on Mobile Channel Retail Delivery Security Mobile financial services (MFS) is a dynamic market in which new handsets and consumer electronic devices are being introduced to the market on a regular basis; therefore, it is of paramount importance that FIs keep up to date with these devices and trends to ensure that they are safe for their customers to use. As a case in point, Android usage for MFS is growing significantly; however, in December 2009, phishing malware was discovered in the Android app market posing as mobile banking apps for more than 50 banks and credit unions (which did not have Android smartphone applications). As a result, we rated the FIs on the types of security listed in Figure 5 and include a section on security in this report. FIs were awarded up to a maximum of 12 points for their security provisions.1 FI’s Were Judged Against 3 Security Criteria Figure 5: Security Scoring Criteria Security Mobile multi‐factor authentication Remote deactivation Anti‐malware ‐ education This report further includes data collected online from a random‐sample panel of 5,211 households in March 2010. The survey targeted respondents based on proportions of gender, age and income representative of those of the overall U.S. online population. The margin of sampling error is ±1.36% at the 95% confidence level. This report is also based on data collected online from a random‐sample panel of 3,100 respondents with mobile phones in July 2010. The overall margin of sampling error of ±1.76 is at the 95% confidence level. 1 A more complete and up‐to‐date assessment of security will be made in Javelin’s annual Mobile Security report due in the fourth quarter of 2010. T +1 925 225 9100 ∙ F +1 925 225 9101 ∙ 4301 Hacienda Dr. ∙ Pleasanton, CA 94588 USA ∙ inquiry@javelinstrategy.com ∙ www.javelinstrategy.com Syndicated Sample Report 2010 Mobile Banking Scorecard – Shift in Smartphone Ownership Calls for a Shift in Focus: How 19 Top Financial Institutions Compare on Mobile Channel Retail Delivery Table of Contents Overview ...................................................................................................................................................................................... 4 Primary Questions .......................................................................................................................................................... 4 Methodology ................................................................................................................................................................................ 5 Marketing & Security Messaging ................................................................................................................................... 5 Mobile Access ................................................................................................................................................................ 6 Features ......................................................................................................................................................................... 7 Security .......................................................................................................................................................................... 9 Summary of Key Findings ........................................................................................................................................................... 10 Executive Summary .................................................................................................................................................................... 12 Key Findings ................................................................................................................................................................................ 14 The Top Four Banks By Deposit Size Scored Amongst The Highest ............................................................................. 14 Marketing and Security Messaging .............................................................................................................................. 15 Customer Support Representatives Play A Crucial Role in Your Marketing Efforts ....................................... 17 Mobile Access .............................................................................................................................................................. 18 Financial Institutions Need To Focus On Multiple Smartphone Platforms .................................................... 19 Mobile Banking iPhone Ratings ..................................................................................................................... 24 Financial Institutions Need to Offer All Three Key Modes of Access ............................................................. 25 Shifting Sands – From Network Operators and Handset OEMs to Internet Application Developers ............ 28 Spotlight – Bank of America ......................................................................................................................................... 30 Functionality & Features .............................................................................................................................................. 32 Mobile Banking Usage By Ethnicity ............................................................................................................... 34 Security ........................................................................................................................................................................ 36 Mobile Banking Vendors Should Look At Their Current Business Models ................................................................... 37 Small to Mid Sized Banks Represent New Opportunities For Vendors .......................................................... 37 Appendix .................................................................................................................................................................................... 38 Companies Mentioned ............................................................................................................................................................... 41 T +1 925 225 9100 ∙ F +1 925 225 9101 ∙ 4301 Hacienda Dr. ∙ Pleasanton, CA 94588 USA ∙ inquiry@javelinstrategy.com ∙ www.javelinstrategy.com Syndicated Sample Report 2010 Mobile Banking Scorecard – Shift in Smartphone Ownership Calls for a Shift in Focus: How 19 Top Financial Institutions Compare on Mobile Channel Retail Delivery Table of Figures Figure 1: Marketing and Security Scoring Criteria ........................................................................................................................ 5 Figure 2: Mobile Access Scoring Criteria ...................................................................................................................................... 6 Figure 3: Scoring Criteria for General Features ............................................................................................................................ 7 Figure 4: Scoring Criteria for SMS Features ................................................................................................................................. 8 Figure 5: Security Scoring Criteria ................................................................................................................................................ 9 Figure 6: FI Awards for Mobile Banking ..................................................................................................................................... 13 Figure 7: Mobile Banking Scores ................................................................................................................................................ 13 Figure 8: FI Deposit Ranking, Mobile Score and Mobile Ranking ............................................................................................... 14 Figure 9: Top Reasons Cited by Consumers for Not Using Mobile Banking ............................................................................... 15 Figure 10: FIs’ Overall Marketing and Security Messaging Rankings ......................................................................................... 16 Figure 11: Detailed Marketing and Security Messaging Scores ................................................................................................. 17 Figure 12: Aggregate Mobile Access Scores ............................................................................................................................... 18 Figure 13: Mobile Banking Applications by Operating System .................................................................................................. 19 Figure 14: Smartphone Market Share by Handset Manufacturer Owned by Consumers, 2010 vs. 2009 ................................. 20 Figure 15: Mobile Banking Smartphone Usage .......................................................................................................................... 21 Figure 16: Smartphone Applications Offered by FIs .................................................................................................................. 22 Figure 17: Smartphone Penetration vs. Feature Phone Penetration ......................................................................................... 23 Figure 18: iPhone Application Ratings ....................................................................................................................................... 24 Figure 19: Comparison of the Various Access Modes ................................................................................................................ 25 Figure 20: Comparison of the Various Modes of Access, 2009 to 2010 ..................................................................................... 26 Figure 21: Access Modes for Mobile Banking, 2008 to 2010 ..................................................................................................... 27 Figure 22: Shifting Power from Carriers/Handset OEMs to Internet Application Developers ................................................... 28 Figure 23: Manufacturers’ Preferred Platform for Developing Mobile Banking Applications ................................................... 29 Figure 24: Bank of America’s Mobile Banking Offering .............................................................................................................. 31 Figure 25: Weighted Scoring of Mobile Banking Features Offered by FIs .................................................................................. 32 Figure 26: Mobile Banking Functionality .................................................................................................................................... 33 Figure 27: Mobile Banking Usage by Ethnicity ........................................................................................................................... 34 Figure 28: Mobile Banking Users by Ethnicity: Received a Financial Alert by E‐mail ................................................................. 35 Figure 29: Mobile Banking Users by Ethnicity: Received a Financial Alert by SMS .................................................................... 35 Figure 30: FIs’ Scores for Security of Mobile Banking ................................................................................................................ 36 Figure 31: Percentage of Consumers Who Use Mobile Banking, 2008– 2010 ........................................................................... 38 Figure 32: Mobile Banking Access Modes Used by Consumers, 2010 vs. 2009 ......................................................................... 39 Figure 33: Mobile Banking Features Used by Consumers, 2010 vs. 2009 ................................................................................. 40 Figure 34: Access by Financial Institution Detailed (Unweighted) ............................................................................................. 41 Figure 35: Features by Financial Institution Detailed (Unweighted) .......................................................................................... 42 T +1 925 225 9100 ∙ F +1 925 225 9101 ∙ 4301 Hacienda Dr. ∙ Pleasanton, CA 94588 USA ∙ inquiry@javelinstrategy.com ∙ www.javelinstrategy.com Syndicated Sample Report 2010 Mobile Banking Scorecard – Shift in Smartphone Ownership Calls for a Shift in Focus: How 19 Top Financial Institutions Compare on Mobile Channel Retail Delivery Companies Mentioned Companies Mentioned Apple Key Corp. Bank of America Marshall & Ilsley BB&T Corp. PNC Bank BBVA Compass Regions Financial Capital One SunTrust Bank Citigroup Synovus Financial Fifth Third US Bancorp Google USAA Federal Savings Huntington Bancshares Wells Fargo ING Group Zions JPMorgan Chase & Co. T +1 925 225 9100 ∙ F +1 925 225 9101 ∙ 4301 Hacienda Dr. ∙ Pleasanton, CA 94588 USA ∙ inquiry@javelinstrategy.com ∙ www.javelinstrategy.com 2010 Mobile Banking Scorecard – Shift in Smartphone Ownership Calls for a Shift in Focus: How 19 Top Financial Institutions Compare on Mobile Channel Retail Delivery KEY FINDINGS Scores of the Top Four Banks by Deposit Size Bulge‐Bracket FIs Have More Robust Mobile Offerings Figure 8: FI Deposit Ranking, Mobile Score and Mobile Ranking Financial Institution
Deposit Ranking
Mobile Score Mobile Ranking
Bank of America
1
78
2
BB&T Corp.
2
68
5
BBVA Compass
3
69
4
Capital One
4
70
3
Citigroup
5
62
7
Fifth Third
6
51
9
Huntington Bancshares
9
36
15
ING Group
11
38
14
JPMorgan Chase & Co.
12
60
8
Key Corp.
13
49
10
Marshall & Ilsley
16
33
16
PNC Bank
17
30
19
Regions Financial
19
63
6
SunTrust Bank
24
46
11
Synovus Financial
26
33
16
US Bancorp
27
39
13
USAA Federal Savings
28
47
12
Wells Fargo
33
81
1
Zions
38
33
16
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Reference: Deposit Ranking from American Banker
© Copyright 2010 Javelin Strategy & Research. All rights reserved. It is protected by copyright and other intellectual property laws. You may display or print the content available for your use only. You may not sell, publish, distribute, re‐transmit or otherwise provide access to the content of this report. 14 2010 Mobile Banking Scorecard – Shift in Smartphone Ownership Calls for a Shift in Focus: How 19 Top Financial Institutions Compare on Mobile Channel Retail Delivery As depicted in Figure 14, since October 2008, Android‐equipped Javelin recommends that FIs that do not have an Android devices have captured 21% of the U.S smartphone market share, application at this time seriously consider launching one in the up 5.25 times from the prior year, when Android handsets had near future. As more handset manufacturers move toward only 4% market share. We believe that many consumers Android to fend off the iPhone, Android market share will only E
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postponed new iPhone purchases pending issuance of the 2
increase, and FIs need to ensure that they are well positioned to iPhone 4 model. Given the strong growth of Android handsets, exploit this trend. FIs Cannot Afford to Neglect the Android Platform Figure 14: Smartphone Market Share by Handset Manufacturer Owned by Consumers, 2010 vs. 2009 29%
BlackBerry
32%
21%
Android phone 4%
18%
17%
Apple iPhone
12%
Various Samsung devices
15%
10%
11%
LG
3%
Palm
11%
3%
3%
Various Nokia devices
1%
Various Motorola devices
4%
1%
Various HTC devices
2010
3%
2009
6%
Other, please specify
4%
0%
5%
10%
15%
20%
25%
30%
35%
Percent of Consumers
Q5: You indicated you own a smartphone. Which of the following do you currently own? (Select all that apply)
July 2010, 2009, n = 1,052, 541
Base: All smartphone owners.
© 2010 Javelin Strategy & Research
2 An iPhone 4 was leaked by Gizmodo in April 2010: http://gizmodo.com/5520164/this‐is‐apples‐next‐iphone, accessed August 2, 2010. © Copyright 2010 Javelin Strategy & Research. All rights reserved. It is protected by copyright and other intellectual property laws. You may display or print the content available for your use only. You may not sell, publish, distribute, re‐transmit or otherwise provide access to the content of this report. 20 2010 Mobile Banking Scorecard – Shift in Smartphone Ownership Calls for a Shift in Focus: How 19 Top Financial Institutions Compare on Mobile Channel Retail Delivery Need for Financial Institutions to Offer All Three Key Modes of Access navigating and transacting are slower and more banking, specifically without a smartphone. limited in browser‐based banking than in online To cater to the broadest consumer base possible, FIs should •
Downloadable applications for smartphones. The offer all three key modes of access. In our 2010 Mobile Banking introduction of the iPhone in 2007 as well as Android‐
Vendor Analysis report, Javelin outlined the three key modes of equipped handsets in 2008 paved the way for FIs to access (SMS/text, WAP/browser and downloadable smartphone bypass the embedded applications model and go directly to consumers who wanted a mobile banking applications) that FIs need to offer consumers for a application. These applications are available in app comprehensive mobile banking strategy. Descriptions of these E
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stores, such as the Apple App Store, or may be offerings follow and are in Figure 19. •
accessed via a link available on a FI’s website. SMS/text‐based banking. SMS/text banking enables In addition, embedded applications, sometimes called “rich almost anyone with a cell phone to inexpensively client” applications, are customized to streamline the online conduct many basic banking transactions. SMS is best •
suited for simpler transactions such as verifying experience. They are more convenient for complex transactions account balances. Messages are limited to 160 such as payments and fund transfers; however, they require the characters. cooperation of mobile network operators (MNOs), which control Browser‐based banking. Often referred to as Wireless the applications that may be downloaded or embedded on new Application Protocol (WAP) or mobi sites, WAP/
phones. As highlighted in our 2010 Mobile Banking Vendor browser mode essentially shrinks the experience a Analysis report, with the advent of smartphones such as the consumer would get by logging on to a personal iPhone and Android‐equipped handsets, the popularity of computer. This experience is the one with which embedded financial applications has diminished greatly. existing online bankers are familiar; however, Embedded Applications Are Being Phased Out by FIs Figure 19: Comparison of the Various Access Modes SMS/text Banking Browser‐Based Downloadable Smartphone Application Embedded Application 100% of phones sold today 95% of phones sold today; may require activation Available on smartphones such as iPhone, BlackBerry and Android‐
equipped handsets Limited availability and usage, diminishing popularity FI/carrier agnostic FI/carrier agnostic FI/carrier agnostic Requires FI to partner with mobile carriers Relatively less expensive Requires expensive data plan Requires extensive data plan Requires extensive data plan Easy to set up for most consumers Relatively easy to set up and use for most consumers Relatively easy to set up But downloading may present challenges for some √ √ = Recommended by Javelin √ √ Easy to set up; however, consumer needs to purchase device with embedded application © 2010 Javelin Strategy & Research © Copyright 2010 Javelin Strategy & Research. All rights reserved. It is protected by copyright and other intellectual property laws. You may display or print the content available for your use only. You may not sell, publish, distribute, re‐transmit or otherwise provide access to the content of this report. 25 Syndicated Sample Report 2010 Mobile Banking Scorecard – Shift in Smartphone Ownership Calls for a Shift in Focus: How 19 Top Financial Institutions Compare on Mobile Channel Retail Delivery Place Your Order as Follows: 1) Call us at (925) 225‐9100 Ext. 31 2) Email us at inquiry@javelinstrategy.com 3) Fax or Mail using the form below: Report Title Name: Publication Date Organization: Division or group: Email: Phone: Price Title: Fax: Address: Signature to confirm your order: Payment Method: [ ] Payment card [ ] Check Enclosed [ ] Invoice me Exp date: ___/___ Visa, MC, AE or Disc. card #: Name on Card: Signature: For invoicing, provide PO number: (Invoicing is available to financial institutions or publicly owned firms) Note: Reports are provided in electronic PDF form only. Javelin reports are subject to standard terms and conditions, as described on our web site. Javelin will contact you in the future to provide our free research newsletter or other mailings. If you do not wish to receive our newsletter or other mailings, you may advise us of this. Your contact information will not be sold to other organizations. T +1 925 225 9100 ∙ F +1 925 225 9101 ∙ 4301 Hacienda Dr. ∙ Pleasanton, CA 94588 USA ∙ inquiry@javelinstrategy.com ∙ www.javelinstrategy.com