BofA Mobile Banking case Essay

Introduction Bank of the States (BofA) is the largest bank holding company in the United States, by assets, and the second largest bank by market capitalization. As a global Finance Service Institution, BofA serves clients in more than 150 countries and has a relationship with 99% of the U.S. The banks 2008 acquisition of Merrill lynch made Bank of America the worlds largest wealth manager and a major(ip) player in the investment banking industry. BofA launched runny banking in May 2007. peregrine Banking permits customers easily and securely access balance information, pay bills with optional Bill cover renovation, transfer cash in hand, and find nearby ATMs and banking centers through a active application on their smartph sensations, and through industrious web on their phone browser. Douglas, SVP of Mobile crossway Development was quoted, In less than 3 years we have four million mobile banking customers. Thats an adoption rate al most five to octonary times that of our online banking several years ago. Line-of-business managers argon looking for leveraged mobile platforms with functionalities that fuel meet contrastive needs and the different target groups much(prenominal) as Merrill Lynch brokerage, mortgages, credit cards, consumer payments, etcThe capabilities of mobile banking through the use of smartphones or mobile web have become popular with todays bank customers. There are increasing overall growth in mobile banking in the financial work industry. In addition, the accomplishment cost1 of mobile banking and internet banking is much lower than the tralatitious channel (e.g. Branch, Call Center, ATMS and IVR). Due to the economic downturn, banks are looking for ext force out the service channels and aim to increase the profit via tradition core banking service, such as transaction fees.The system automation can reduce the operation cost increase the transaction turn or so time and accuracy. With the popularity of smartphones and mobil e data services, mobile banking can be the booming tools for banking industry profit engine. However, investing in the enhancement of the mobile banking is costly and will directly affecting the banks revenue and brand images. The worse scenarios, may encounter customer complain and regulatory comments and punishments. Therefore, the management of BofA have to decide how can they effectively utilize this technology as a untested media to make banking services easier, faster and more convenient for customer, at the same time, how can the app can help for BofA marketing the banks untried products, service and increase the customer dedication. In the short run, what do BofA tell the line-of-business managers should the app increase functionality, build spic-and-span app or refuses to add complexity to the current app? In the long run, how do BofA position the bank in this fast changing industry?Analysis Mobile banking (app) is not a mandatory product (or check out channel) for banks customer. Its just an optional channel, based on the product itself, lets analysis base on Porters 5 forces analysis. 1. New entrants are HIGH. There will not be any cutting large mass-market players or niche players bursting on the scene, but thither will be advanced independent players like PayPal that will provide some similar functions app in the market. 2. Power of suppliers are from MEDIUM to LOW. The majority of the suppliers of mobile banking should be those technologies partners, technology consultants, outsource package house and marketing partners as alliance in some promotion campaigns.Bank has stronger power than those outsource software house in most situations. 3. Bargaining power of buyers is HIGH. Given the mobile banking is only an optional channel for customer. Customers still have different options to complete their transaction thru the bank and able to say NO to mobile banking. The switching cost of changing the channel is low but the switching cost o f BANK may from LOW to MEDIUM. 4. Threat of substitution is HIGH. Currently customers still can utilize other channels to fulfill their needs via Branches, Call Center, ATMS, Internet banking and IVR. 5. Intensity of controversy is HIGH. Many banks like Well Fargo, Citibank, JP Morgan are working on the mobile banking and each of these app have the same majority functions and include some differentiate functions.BofA Mobile Banking App functionalities To install the app and apply the mobile banking is free. As the mobile banking include 3 major segments of core function Mobile Website, Text Banking and Mobile App2 . The BofAs new app include below functionsCheck account balances for accounts and facilities lines held with BofA. Pay bills. Transfer funds between BofA accounts. View transaction details for all BofA accounts or facilities lines, including posted, pending and plan transactions. BofA Mobile Banking App include the majority functions that customer requires and lets talk about the Brand of BofA in the following section. The Brand of BofA & CompetitorsBank of America ($30.6B) is the most valuable banking brand in the USA. Its brand value has increased by 18% and it has a brand rating of AAA-. Despite concerns of further mortgage-related write-downs, Bank of America was also the 1 most valuable banking brand in the world at 2011. The DesignsThe Bank and the Mobile Banking App LogoGiven the icon of BofA can be shown in the Bank and the mobile banking logo, it can help the customers to connect the mobile banking app to BofA. The color use of the Bank is Red and Blue and the Mobile banking is single victimisation Red only. Red color is a powerful color, symbolizing energy, rage or even danger. It works best for action-oriented products or brands, products associated with speed or power, or dominant or iconic brands. The mobile banking icon didnt use the Red and Blue color which only using Red to show the passion and commitment of the bank to customer via mobile banking. Bank of America and Mobile Banking SlogansBank Bank of America. Higher Standards Embracing ingenuity Think what we can do for you Mobile Banking Life is mobile, so is your bank The Slogan of Mobile Banking can directly identify the availability and accessibility of the apps that can provide the mobility banking services everywhere. However, it cant strongly connect to the Banks core Slogans.Recommendations Given the increment of additional functions will slow down the performance of the mobile banking app it does not recommend incorporating the additional business functions to the current app. From technologies risk and regulatory prospective, it will be too risky if pulling all business applications in one single platform. If on module down, it will totally affect the bank normal day to day operations. In short run, suggest developing new apps for extending the advance mortgages, credit cards service or investments service for different business functions.To lev erage different brand to differentiate the different category of services that offered. Apart from leverage different brands3 own by the group, BofA can also cooperate with Smartphone and Telecom Services Providers to ingredient branding to provide the end to end mobile service. Bank customer can encounter discount on purchase latest smartphones, discount on data service plan and manageable to issue mobile credit cards by offering promotions. BofA can consider consolidating all apps in one single platform when there are needs in future. In long run, BofA can cooperate with the Telecom Services Providers and sizeable Merchants, to provide addition information for customer when customer arriving the merchants and let them know what kinds of promotions or discounts are offer.This can uplift the service from singling banking service to mobile living yellow pages. This can help to increase the customer loyalty and build strong connections with bank customers. It can also attract more a lliance (other merchants) to share the promotion and marketing cost to developing a new banking and living experience. Of cause, it is needful to maintain the balance of utilizing the mobile banking app, customers segments for marketing promotion events, if over sell which may obtain opposite result.To differentiate BofA from other competitors, it is necessary to ensure the Bank can position the Bank with Stronger Branding and Images extend the services from Banking only to diversify the service to other related informational services in daily life and provide incredible services and experience for customers. This can help the bank to reposition the bank as a full around bank which can fulfill customer day to day activities that require of any payment or transactions.This can help to identify stronger alliance for the long term development. In conclusion, BofA must keep on investing in mobile banking apps, as it is a trend that smartphone or more innovative plait (e.g. Google devi ce) will become more popular, bank must utilize these new technologies by re-design the current channels to increase the bank traditional income (e.g. Transaction fees) and other new incomes (e.g. investments service, financial consultation service, etc.) and extend the service with alliance to promoting the daily service tools. This can help the bank to enlarge the customer groups, define new customer groups segments or sub-segments for better marketing and promotion campaigns and maintain the brand in the leading positions.Exhibit 1 Costs per Transaction by different channelsThe Pricing, when the apps developed to more advance, and able to customize and fully integrate full around service for customer, at that time, BofA can consider of charging customer for service charges after trial. If customers are satisfying with the full around services after the trial, the bank can also extend the income by promotion the comprehensive mobile banking and service apps. Exhibit 2Mobile websit e Customers can pay bills whenever they want with optional online Bill Pay. Check balances on checking accounts, savings accounts and credit cards. Transfer funds immediately to any other Bank of America account. Locate banking centers or ATMs, along with maps and directions. Text bankingUse text message banking to request information about self-own checking, savings and credit card accounts. Getting the answers you need is simple when its received within seconds on your phone. Mobile appMobile Banking App, designed specifically for iPhone, iPad, Windows Phone, blackberry bush, HP webOS and Android devices. Wherever you are, youll have easy access to your Bank of America accounts with their quick and convenient Mobile Banking App Exhibit 3 BofAs branding