By Ron Daly, President/CEO
Virtual StrongBox, Inc.
Source: https://www.cbinsight.com/starting-mobile-first-system-bank.html

“Mobile banking today is more than just another channel; it has become the remote control for all banking interactions. Mobile devices allow users to speed up ATM withdrawals, set in-branch appointments, turn debit cards on and off, and interact with voice-based artificial intelligence.”

Whew! That pretty much says it all. Javelin’s new 2016 Mobile Banking Financial institution Scorecard: Mobile Becomes the Remote Control for Banking should convince anyone who thinks mobile is today’s “hot new thing” to see more clearly. Whether or not all of your customers have adopted it, mobile banking is now the linchpin for bank service delivery.

Writing on this topic in CB Insight last January, I posed the question, “What would our industry do differently if we could start over?” Rather than bolting mobile banking to an online banking platform or other program, which is then bolted onto a legacy system, perhaps we would have designed a mobile-first system – one where mobile banking is the premise and other tools are developed around it.

Can you define it?

One problem is there’s a lot of confusion about what “mobile first” really means. As one of the most overused, misunderstood phrases in business circles today, it’s in danger of slipping into jargon. Some think mobile first relates to “millennials who do everything on their phones.” Others think it means “a customer who manages his bank account on a mobile app instead of online or at the branch.” My personal favorite non-definition is that mobile first is about “giving advice to marketers to rethink their ‘customer experience’ and remap their ‘customer journey.’” Talk about jargon!

But one explanation that really gave me heartburn came from a prominent bank core-processor: Mobile first is “consumers who prefer to bank only on their mobile devices, or turn to the mobile channel first – so-called ‘mobile-first’ users.” No, that isn’t it! Mobile first isn’t a group of people, or today’s marketing push, or just another channel. Instead, take a look at Technopedia’s definition: “Mobile first strategy refers to companies’ increasing tendency to design their products for mobile phones or devices before making correlate designs for traditional desktop and laptop computers.”

In his book, The Amazon Way: 14 Leadership Principles Behind the World’s Most Disruptive Company, former Director of Merchant Integration John Rossman says, “Leaders and managers at Amazon always start with the customer and work backwards. While they watch competitors, they obsess over their customers.” The same premise applies to a mobile first strategy.

So, what can we do about it now?

To go truly mobile first, Jeffrey Pilcher, CEO/Publisher of The Financial Brand, says banks need to grit their teeth and upgrade their core systems. His article, Core Banking Systems: The Industry’s Achilles Heel, notes, “Many

[core systems] have been nursed along for decades with little more than bandaids, duct tape and some chicken wire. If you’re going to compete in the Digital Age, it’s time to bite the bullet and get serious about a core conversion.”

I agree with Pilcher; no doubt replacing legacy systems – and choosing technology that centers on a mobile-first strategy – needs to happen sooner rather than later to remain competitive. But it’s costly; and even as banks scurry to make upgrades, it’s a time-consuming process. The answer for many institutions is to connect their existing systems and workflows to cloud technology, which is both affordable and relatively quick. In turn, this allows you to connect your technology to members’ technology. And, by allowing your employees to use their same consumer tools; e.g., smartphones and tablets, you can gain efficiencies and stay on top of today’s technology.

Security can be worrisome. A common fear among some banks is that transitioning to the cloud is risky because it isn’t safe. Like all high-security-risk industries, banks are bound to ensure the privacy of customer’s personal information. But with the right technology and security provider, you can ensure customer safety the new “financial institution way,” which includes end-to-end encryption. But instead of “traditional” cloud storage that offers little to no protection, choose a provider that cares as much as your institution does about safeguarding important files.

At Virtual StrongBox, we’ve addressed our bank clients’ security concerns through our patented, highly secure, encryption technology, which safeguards customer information both in transit and during storage using Enterprise-IT grade protection, through private SSAE 16 certified data centers. Banks provide their customers with individual, online “safe-deposit boxes,” where they can store important papers like deeds and wills. The banks then use the same process to exchange files with customers, such as mortgage documents or eStatements.

By moving your legacy systems to the cloud, your bank can streamline its back-office operations and redeploy part of your workforce to other areas, such as assisting customers who need person-to-person help. Legacy core systems represent a huge investment; but against new technology, they’re fast outdated. Cloud technology can work with these systems so you can stay competitive in a mobile-first world.

The clock is ticking to ensure your mobile customer experience is on par with the apps your customers use every day for tasks like ordering a prescription, making a dinner reservation or tracking laps at the gym. With newly established fintech companies and startups like Acorns, Coin, Digit and Lending Club already vying for your customers’ affections, it’s time to make sure your mobile apps are first rate.