Digital A-List 2009

Consumer Control Brings Brand Loyalty to Bank of America

Mobile Program Less About Advertising, More About Positioning for Future of Banking

By Published on .

Illustration: Pete McDonnell

SAN FRANCISCO ( -- Bank of America's foray into mobile banking is more than a gimmick, and its iPhone application is more than just a reason to issue a press release. Underlying all of the marketer's moves into mobile services and marketing is a key insight: Give people more control over their banking on their own terms, and you'll win their loyalty.

BofA is one of a small but growing group of marketers that have figured out that mobile marketing isn't about advertising. That's not to say mobile advertising will play no part, but that mobile, like most things digital, is not a channel so much as a way consumers live their lives and, consequently, a way marketers have to conduct their business.

The biggest U.S. bank launched its mobile website in 2007, becoming one of the first major U.S. banks to invest in the platform, to position it to take advantage of the next frontier: mobile transactions. BofA was the first to launch an iPhone banking application, today the handset's most-downloaded financial app. With more than 2 million of its 59 million customers using its mobile banking application, Bank of America can lay claim to having the highest adoption rate of mobile-banking usage among its competitors.

Between 8% and 10% of the bank's mobile-banking customers are new to the bank, suggesting that mobile was an influence in their decision to choose the bank.

The payoff has made a "material impact on customer satisfaction," said Douglas Brown, senior VP-mobile product development, declining to disclose quantifiable details.

Customer experience key
The bank's approach to mobile was informed by proprietary research, including studying how consumers interacted with mobile. It also reached out to players in the wireless ecosystem, including carriers and handset makers. From analysis to launch, the process spanned roughly a year, and understanding the customer experience was key to the success of its mobile application.

"You want to make a positive first impression. ... You may not be able to recover if someone has a bad mobile experience right out of the gate," said Mr. Brown. "If it is done right, it's a great way to endear customers to your brand."

BofA iPhone

Bank of America's successful iPhone app uses the device's GPS to point people to the nearest branches and ATMs.

To that end, Bank of America is constantly on the lookout for feedback about its mobile-banking tool, keeping tabs on user reviews and suggestions in app stores and online postings. Last year, its mobile-banking customer set moved from a younger group of users between 18 and 30 to one that includes many older, higher-income users.

"It's very important to provide a preferred channel of interaction," Mr. Brown said. "People like [the application] because it lets them control their finances better and stay on top of their balances. It makes them feel better about their finances, and that ... engenders loyalty to the brand."

Jon Paisner, an analyst at the Yankee Group, praised the fact that it offers a traditional web-browser-based solution, which is accessible to the greatest number of people. Some 800 mobile handsets support the application, and downloadable smartphone apps are available to iPhone, Android and BlackBerry users.

The downloadable mobile-banking application -- developed in-house and consistent across BofA's smartphone apps and mobile web -- has been lauded for clean navigation, ease of use and reach. The application is intuitive and useful. Case in point is the branch and ATM locator, which uses the location-based systems built into many phones. The bank said the finder tool is used by one in eight customers who use the application.

"Bank of America is clearly a leader because they were willing to invest early on and they invested smartly and put a plan in place that was practical and logical, and it's paid off," says Mark Beccue, an analyst at ABI Research.

Traditional promotion
The bank's success in mobile also has to do with good old-fashioned promotion, which has included TV campaigns showing the benefits of banking on the go. The bank is also running a campaign on AdMob's iPhone network to pitch its application for the handset, according to the mobile ad network.

Plus, the bank's online website makes a strong case for using mobile banking, complete with demos and tours. Jim Bruene, editor of the Online Banking Report, calls it "the most comprehensive" website for showing off mobile banking.

Mobile is not just a customer-acquisition and loyalty tool; it's also an area of cost savings. The more customers a bank can move to self-service digital channels, the more the bank can save. Costs of a call-center conversation start between $6 to $10, compared to pennies for an automated digital channel.

But for all the savings banks can reap by encouraging their customers to bank wirelessly, the efforts are also about priming them to transact wirelessly in ways that will eventually be new revenue streams for the banks.

One revenue stream banks are eyeing is charging customers for facilitating person-to-person payments, where individuals pay one another in lieu of checks or paper currency. Banks are hoping consumers will use their phones to pay for everything from gas to groceries using technology called near-field-communication payments, which involve an onboard commerce chip. Each time credit is used, the issuing bank gets a cut of the transaction.


Douglas Brown
Don't let fear of failure keep you from trying new things. Consumers will forgive mistakes if you listen and respond quickly.

"Our rapid growth experience has taught us to deploy relevant and high-quality services and react fast (very fast) to any mistakes that your mobile users call to your attention," said Douglas Brown, senior VP-mobile product development. "Mobile customers are powerfully vocal and passionate ... [but] they will be fiercely loyal to the brands who best respond to their needs."

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