Tablet Mobile Banking Apps Forge Next Frontier
As credit union executives keep their eyes on the rise in digital banking costs, some of them are wondering if the industry really needs a dedicated mobile banking app for tablets.
The growth in tablet sales is one clear sign that the consumer demand is there.
According to the Stamford, Conn.-based research firm Gartner, year-on-year sales shot up 68% between 2012 and 2013.
However, the tablet app for iPads is another story.
The device's market share dropped sharply to 26.9%, down from 60% in 2012, data from research company IDC in Framingham, Mass., revealed.
Meanwhile, Android has more than 60% of the market cornered.
Some experts are predicting continued growth in tablet sales.
“In many homes, laptops are getting replaced by tablets,” said Julie Moran, vice president of support services at the $5.6 billion Digital Federal Credit Union in Marlborough, Mass. “We strongly believe we need a tablet app,” she added, saying the credit union has an iPad app and an Android version is in the works.
On July 30, the $8 billion Security Service Federal Credit Union in San Antonio introduced both iPad and Android apps after a year of development, John Worthington, EVP and chief communications officer said.
As for why the credit union decided to take this plunge, he said member demand prompted the move.
“Tablet apps are something you need if you want to play in this space,” Worthington said. “Look around; you see a lot of people on iPads and they want to do banking on them.”
Not every credit union agrees that tablet apps have become a necessity.
The $340 million Glendale Area Schools Federal Credit Union in Glendale, Calif., does not have a tablet app and presently, one is not on the drawing board, said President/CEO Stuart Perlitsh.
“We have not heard the member demand,” he shared.
Mary Monahan, EVP at Pleasanton, Calif.-based Javelin Strategy + Research, said tablet apps had become a must-have for financial institutions with 53% of Americans now owning tablets.
“Tablet banking is rising like crazy. You have to look at where the future is,” she explained. “If you don't have a tablet app, you are opening the door to competitors, including nonbank competitors.”
Byl Cameron, digital technology leader at Carlisle & Gallagher Consulting Group in Charlotte, N.C., echoed that sentiment.
“We believe financial institutions need a tablet app,” he said.
At least at some of the biggest financial institutions have already adopted tablet banking. Bob Graham, head of banking and financial services at Virtusa, an IT services company in Westborough, Mass., said he recently checked the top 25 banks and two-thirds had them.
What's also becoming the norm at top institutions is to offer both an iPad and an Android tablet app because the latter continues to sell very strongly.
Indeed, some credit unions with dedicated tablet apps insist they are worth offering. The nation's biggest cooperative, the $60 billion Navy Federal Credit Union in Vienna, Va., continues to see steady usage growth of its tablet apps, said Meghan Gound, assistant vice president for eChannels.
Navy Federal launched an iPad app in September 2013 which has now been joined by an Android tablet app. One of the key features is the tablet app takes advantage of screen size, generally 7 to 10 inches versus 5.5 inches on big smartphones. As a result, users get richer content.
“We built the iPad app differently,” Gound said. “We made a lot more content available. Users spend more time on their tablets.”
Navy Federal plans to roll out a membership application in the iPad app soon, Gound said.
“You will get an instant decision,” she said, adding the credit union is also looking at featuring a loan application in its tablet apps. Many more features are under consideration as the tablet user experience continues to be a top priority, Gound noted.
Some experts agree that, as a matter of course, the tablet app needs to be richer in features and capabilities than a smartphone app. The device itself usually provides a bigger screen and a bigger and softer keyboard; external keyboard options are plentiful. That means content consumption is easier on a tablet than a phone and so is content creation.
Thus, the richer apps.
Cameron, for instance, estimated that on average, a mobile banking app might offer 20% to 30% of the functionality available to online banking users. By contrast, he said a typical tablet app would offer 60% to 70% of the functionality.
While the apps may be rich, some warn credit unions shouldn't expect a landslide of members adopting a tablet app.
Robb Gaynor, a co-founder of the Austin, Texas-based apps developer Malauzai, said that at best-in-class institutions, roughly 8% to 10% of iPhone app users also use an iPad app.
He stressed that iPad users use the device to complement their activities on their mobile phone.
“Usage varies and behavior is different,” Gaynor said. “Money movement is 2.5 times higher on average using the iPad. Certain features like viewing check images are used two to three times more on the iPad than the iPhone. Session usage is also longer on the iPad.”
Even so, Gaynor admitted, “We thought usage would be higher. It frankly won't add a ton more users, that's not what we are seeing.”
Malauzai currently has 295 mobile banking customers, of which 183 are live with tablet apps, Gaynor said. All new customers are going live with a tablet app and “there have been no exceptions,” he pointed out. Malauzai is now cycling back to established customers and offering them a tablet app.
There is much heavier usage of the iPad tablet app than the Android's at the $555 million Tropical Financial Credit Union in Miramar, Fla., said Amy McGraw, vice president of marketing. There are currently 265 unique Android tablet users and 2,018 iPad users.
Of the 54,000 members of Tropical Financial, just shy of 11,000 are registered iPhone or Android phone users, McGraw said. Twelve percent of mobile app users are also using tablet apps.
Despite slow tablet adoption at many financial institutions, proponents insisted this is the path to the future.
“Many want a bigger screen, certainly for some transactions and activities. That's what the tablet offers,” Moran said.
One complexity on the horizon is the size of smartphones.
“Phones are getting larger, tablets are getting smaller,” Cameron said.
The strong-selling Samsung Galaxy 5S offers a 5.5-inch screen. The iPad Mini is 7.9 inches and Amazon's Kindle Fire is 7 inches.
Does that mean a possible end to the need for a dedicated tablet app? The answer is unknown, but device convergence needs to be monitored, Cameron advised, reiterating that a tablet app is essential.