Sybase Blog – Diarmuid Mallon

Part 3: How I learned to love mobile browser and SMS
So, after all the rigmarole Banks endured to launch those applications, how did customers use these applications? Most requested simple transactions like account balances and mini-statements. For both banks and customers, mobile applications started becoming overkill for simple transactions like account balance inquiries.

Towards the end of 2008 we began to see a shift, as Banks released that to get consumers using the mobile channel they need a more mass-market approach. This meant launching SMS, mobile browser or both.

So how much more mass market is SMS and mobile browser over a downloaded application?

By far, the biggest difference is the installed base that these technologies already have. With SMS there is nothing to install, as all phone support this technology. And with much thanks to ‘American Idol’ most people in the US are now users of this service. In the US, there are approximately 273 million mobile devices (Informa Telecoms & Media), amongst which SMS counts 250 million people are active users, and other countries it is generally close to 100%. Whilst much lower, the mobile browser dwarfs downloads with 45 million active users. Compare that to your new downloadable application that initially as no users, or even the iPhone at less than 2%.

Increasingly, we are seeing Banks either back-filling or launching with SMS and/or mobile browser channels. They have realized having multiple channels are more or less suitable for different services.

Providing an account balance or a mini-statement can be equally served by SMS as mobile browser or application. In some markets even payments and remittances are being triggered in this channel, even if the authentication may occur out-of-band by an IVR call for PIN confirmation.

So has this approach shown better results?

One of the first banks to reap the benefit of this approach was Bank of America, with their mobile browser channel usage. Which today has seen more than 2.6 million customers access their bank through this channel.

Today, most banks exceeding forecasts in first year of approx. 3% -5% uptake. With some exceeding thus, such as USAA reports 11.4% of members using mobile banking, including 20% who view it as primary channel.

So what happened to Applications?