Bank of America:

Mobile Banking

Group 06
 Overview

Founded in 1904 as Bank of Italy

Merged with National bank in 1998

With Kenneth Lewis as CEO, BofA expanded with several acquisitions

By 2009, business included Retail Banking, Global wealth management

among others

Market covered 82% of U.S. population, serving 53 million customers

Held leadership position in 23 metropolitan areas with number-one

mortgage and servicer in U.S.

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 Turmoil at Bank of America

2008 fourth quarter losses

• Subprime, Exposures, Equities

Tactical mistake of 20bn bailout

• Threats of BofA being nationalized
• Stock traded at its lowest in 20 years

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 U.S. Mobile Banking Market

Introduced in 2007, Banks saw Mobile Banking as a channel to differentiae

themselves

Lead to higher income and increased customer retention

Projected as one of the least costly banking channels

Consisted of three options

Mobile Messaging
Mobile Internet
Mobile Apps

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 Mobile Payments
Refers to payment services operated under financial regulation and performed from or via a mobile device.

MOBILE PAYMENTS
Local Mobile Payments Mobile Commerce P2P Payments

o Uses mobile device equipped
with Bluetooth, RFID, infrared
or NFC.
o Payment can be made
contactless to a merchant via
his/her mobile phone.
o Substitute of debit or credit
cards
o Payment of goods and o Allows an individual to send
services when a merchant is money to another person
not located in physical through mobile channel eg-
proximity. Paypal
o Initially used for ringtones , o Global Remittance market-
vitual goods and games. large opportunity.
o Mobile operators add the cost
of the goods to the mobile
phone bill and retained 30-
50% of the end-user
transaction value.

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 The Mobile Initiative

• Service was rolled out in May 2007

• Mobile app was launched – better to start small but with a
Initiation
richer customer experience
• First to offer iPhone banking app

• Market adoption increased

• Debit card holders were the most active users
• Almost 99% viewed an account balance and 90% viewed
Results transaction level details
• Over 15 million location searches annually
• Annualized money movement of 10 billion through bill pay
and e-bills fund transfers

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 Technology
Mobile Messaging
(+) Works across all wireless operators
(+) Require no software installation /
smartphone
(-) Only text-based (less user
experience)
(-) 140-160 characters per message
(-) only basic transaction
Mobile Internet
(+) Connecting through WAP
(+) Banks well-established presence
(+) no development cost
(-) Need data plan
(-) Browser speed and
(-)screen size - less richer experience
Mobile Apps
(+) Can locate banks, ATM through GPS
(+) Smartphone Growth 10% to 46%
(-) Development Cost
Basic : $40,000 - $50,000
Complex: Several thousand dollars
(-) caters to niche customers
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 Digital Marketing

Mobile • Balance between customer service and promotions

• Location based marketing, interactive campaigns, display ads

Online • Search and display ads

• In game applications, email marketing

• Effective use without over saturating customers with messages

Onsite • Bank’s website and ATM
• Message for brand awareness, or introduction to new services, cross selling

Social Media • Creating a balance against conservative culture

• Presence on Facebook, YouTube, Twitter and LinkedIn

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 Implications
• Launch 2 types of apps
Consumers
Business
• Features the app should include:
Previous App features
E-commerce payment gateway
P2P payments option
Option to check credit card information
Benefits
Reduction in total transaction cost
This will help in targeted mobile
marketing campaign, thus reducing CPC.
Increased customer engagement and
cross- selling
Gain access to large mobile E-commerce
payments market
Remove Middle-men (Paypal), thus
increasing own revenues
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THANK YOU

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