With simple Web-browsing functionality and access to a library of user-friendly applications, the iPhone makes it easy to do anything on the Internet, including mobile banking.
And given the device's popularity, every financial firm should get in on the game, according to a new report from research and advisory firm Forrester Research titled "How the iPhone Has Changed Mobile Banking."
In its first two years on the market, more than 21 million iPhones were sold in the world, and while only 7% of cell phone owners access the Internet daily on their phones, 57% of iPhone owners do, Forrester researchers found. Also, financial firms that optimized their sites for easy mobile use reported that 40% of their mobile banking customers were iPhone users.
"Even though the iPhone accounts for a small share of mobile handsets in most countries, it marks the beginning of a new era of mobile banking services that are easy to set up, provide a compelling user experience and offer new and relevant functionality," said report author Alexander Hesse. "E-business and channel strategy professionals cannot afford to ignore this development."
There are four primary reasons why the iPhone is a strong catalyst for mobile banking development, Hesse and his Forrester colleagues argued. First, it allows users to easily read and navigate the content on Web pages.
"By rendering full Internet pages on a decently sized touch screen display that is easy to read and allows simple navigation, the iPhone sets a new standard for mobile Internet browsing," Hesse said.
Second, the iPhone billing plan allows unlimited Internet use, which eliminates any hesitation to browse. Third, users can easily download more than 63,000 applications to their iPhones with nothing more than a click and password entry. Finally, Forrester researchers said, it's this phenomenon of "apps" that's encouraging the creation and use of financial tools on mobile phones.
"Many of the these apps introduce new personal finance functionality, such as bill reminders, checkbook registers or expense management tools, which financial institutions hadn't previously offered as part of their mobile banking services," Hesse said.
This cutting-edge functionality allows financial services providers to connect with iPhone users in a variety of ways-their standard Web sites may be easily accessed, and if credit unions and banks firms have iPhone-tailored Web sites, iPhone users can utilize those as well, the report said. Allowing even easier access to financial firms' mobile banking services are apps, which can be developed by the firms themselves and downloaded by users for free.
With the potential to place their mobile banking services at the fingertips of millions, targeting the iPhone audience is perhaps a no-brainer for credit unions-but what's their best strategy?
While the Forrester researchers said it's imperative that standard Web sites be optimized to ensure they run smoothly on the iPhone, some research must be done prior to developing a separate iPhone site or app. Investigating whether many of the targeted users indeed use the iPhone-whose owners are typically young, educated and affluent-is important before making major investments, the report said.
"For banks with a strong footprint among these customers, offering either a dedicated Web site for the iPhone or a mobile banking app is quickly moving from being a differentiator to becoming a basic customer expectation," Hesse said.
Credit unions may not want to consider the iPhone as the be-all end-all of their mobile banking development. Other wireless brands, such as the BlackBerry, have also introduced mobile apps. "Although Apple's App Store currently leads both in terms of available applications and downloads, other platforms offer sizable opportunities as well," Hesse said.
That said, Forrester researchers said financial services providers can't afford not to explore how the iPhone can improve their business. Online banking services and e-mail reminders may reach customers, but mobile apps have launched an entirely new way to connect.
"With mobile apps, financial services firms have a new channel at their disposal that gives them the opportunity to develop a new generation of relevant mobile banking services with entirely new functionalities," Hesse said.