Banks Now More Wary When It Comes To Wireless

Banks' wireless investments appear to be slowing, or at least leveling out. Only 20% of the top-twenty retail banks offer their customers wireless access--roughly the same percentage that said they offered the service last calendar year.

Given the current economic environment, it makes sense that banks would want to eek out the greatest return on their existing investments rather than plunge forward into uncharted wireless waters. Gomez would advise them no differently. But for banks that need to focus ROI arguments for wireless, we've identified an interesting trend that may help.

Modest Interest

When Gomez asked over 3,600 online banking customers to rate their level of interest in wireless banking on a scale of one to seven, their enthusiasm appeared lukewarm--especially when compared with online brokerage customers. On a scale of one to seven, where one reflects extreme disinterest and seven signifies extreme interest, roughly 20% rated their interest at a five or higher. Meanwhile nearly 24% of online brokerage customers said they not only demand wireless account access--they expect it.

But when we looked more closely at these customers' wireless activities, an interesting paradox emerged: despite the lack of clamoring for wireless banking, people are using their wireless devices for banking-related activities more than for almost any other tasks--including trading stocks and bonds.

Among all online financial services account holders, checking bank balances is a top wireless activity. Over 15% of these consumers check balances using a wireless device. Meanwhile, 10% transfer money wirelessly.

By contrast, only around 4% do wireless trading and less than 8% access personal investment information, sending these activities to the bottom of the list--despite the relatively high frequency with which discount brokers provide these services.

With such a small number of banks offering wireless account access, wireless banking could represent a way for banks to distinguish themselves. By embracing wireless, banks may ingrain themselves into the daily lifestyles of certain consumers, such as those who want to check a balance during a Saturday afternoon shopping trip.

But to successfully court these wireless aficionados, banks need to pay attention to the following considerations:

Education is critical. For firms with a wireless offering, educating clients and prospects about its benefits and nuts-and-bolts usage is key to expanding adoption. The landline Internet, good for many things, can truly excel in the educational department. Banks, in particular, tend to offer sparse wireless information at best. One notable exception is Charter One Bank, which provides a strong example of targeted, distinct and actionable wireless information.

Preach to the choir. Banks should not waste their time courting people who use the Internet, but do not bank online. Our research reveals that these customers seem to be almost personally affronted by the notion of wireless banking. If they do not see the value of online banking, the wireless corollary makes even less sense.

Keep an eye on untapped markets. Looking at international wireless usage in Europe and Asia, a counterintuitive group of customers could play an interesting role: people who are not part of the U.S. personal computer culture who will interact electronically with their banks for the first time through a wireless device (such as a wireless-equipped car). To this point, one of the nation's largest 401(k) managers notes that some of its highest wireless usage is among factory workers who do not have access to PCs at all.

Laggard-fear spurred by the Internet tsunami that caught so many banks off-guard perhaps fueled early wireless expenditures. Regardless, firms with a wireless offering can still reap benefits from it. Banks without a consumer-facing wireless solution, in particular, might want to revisit some of the top (i.e., financially viable) vendors, particularly as pricing becomes more attractive in the current market.

Wireless financial services are still a few iterations away from being universally compelling (such as when phones can act as point of sale systems), but if properly presented and delivered wireless represents an opportunity to both better serve certain clients/prospects today and prepare for future demand.

Matt Stamski is a technology analyst at Gomez, Inc., a Waltham, MA market research and consulting firm that specializes in Web site usability, utility and performance. Visit https://www.gomez.com for more information. Please send any comments or feedback to [email protected].