Mobile might be the future of banking, but Bank of the West is reinvesting in where more of its customers transact today.
Like most banks, the $71 billion-asset unit of BNP Paribas has paid a lot of attention to its mobile apps over the past few years; it was among the first to market with features like Quick Balance and mobile photo bill pay, for instance. Also like most banks, it has devoted less resources to its more mature online banking channel.
The number of Bank of the West customers using online banking, however, is twice the size of its mobile banking user base. To that end, the San Francisco-based bank invested in a website redesign that formally launched last Thursday to bring parity to the two channels.
"We know our customers are leveraging online banking," said Vivian Yeung, head of online banking and payments at Bank of the West. "We wanted to make sure there was a comparable set of capabilities" to the mobile channel.
The move reflects the findings of a survey conducted by Accenture in April. In the "Banking Shaped by the Customer" study, 38% of consumers ranked good online banking services as the top reason they stay with their bank. A third said that online banking was the most important channel for banks to focus on in the next five years; a smaller 20% of participants pointed to mobile banking. In other words, online banking still matters.
"Banks have been focusing on mobile banking because of the attention and need for it — mobile has been in a deeper part of the adoption curve, online banking has been more in the flatter part," said David Albertazzi, a senior analyst at Aite Group. "Some of the investment from online has shifted to mobile."
At the same time, he observed, mobile upgrades have forced many banks to rethink the online side as well.
"As mobile banking strategies are maturing, they're thinking not just in terms of a subset of functionality they found online," he said. "They're rather thinking of mobile in the context of how consumers use mobile — test cases and scenarios. Therefore they're using some native features of the phone, such as geolocation. That has trickled back into online banking, now they're looking at the whole consumer experience."
All banks have been focusing on usability and the customer experience, regardless of the channel, online or mobile, he said.
Among users there is perhaps a convergence of channels and devices. For instance, Jamie Armistead, executive vice president of digital channels at Bank of the West, said tablet users tend to use the online banking site, though the bank offers an iPad app.
"It seems like people are using the browser on the tablets versus being as app centric as they are on smart phones," Armistead said.
Many online banking sites were designed before tablets took hold, he noted.
"We wanted to provide an experience that's easy to use on devices that our customers are choosing to use," Armistead said. "One of the design principles is being tablet friendly."
The bank shifted the site from tab-based to menu-based navigation. "This enables the customer to hover over and see all the selections available to them," Yeung said. "Tab structures can be cumbersome."
Dashboard-like views provide information about customers' accounts and upcoming payments. The bank has also added mobile budget alerts to let customers keep track of their spending when they are away from their computer or tablet.
The bank has added personal financial management tools that track customers' spending. Among banks in general, the adoption of such tools has tended to be low. Customers often don't know about the tools or don't want to visit a separate PFM area. To counter that objection, Bank of the West is making PFM part of the normal online banking site, rather than parking it in a separate tab.
Another issue in the industry with PFM is many solutions don't do a great job of categorizing expenses, Albertazzi said. Some force end users to manually tag transactions. Bank of the West is automatically categorizing expenses, yet allowing customization of the categories. Users can give "nicknames" to their purchases and search transactions using those nicknames.
"When we looked at the PFM space, we looked at the disconnect between what users said they valued and wanted versus what we saw them adopting," Armistead said. "We wanted to figure out why that is, what's wrong, what is broken. We found that almost every solution out there forced the customer to do a bunch of work," including categorizing their expenses.
To facilitate the site makeover, the bank upgraded the Fiserv Corillian software it uses for online banking from version 3.2.5 to 4.2. It also replaced the proprietary middleware software it was using from Fiserv with an enterprise service bus from Software AG and moved to a services-oriented architecture.
The new middleware allows different front end systems to talk to the bank's core banking platform. "It does enable us to provide better capabilities within online banking, it also lends itself to reusability in other channels such as mobile and ATM," Yeung said.
The web services used by the online banking system to retrieve customer information and account data, for instance, could be used by the ATM channel, the mobile channel, the contact center or the branches.
In so doing, Bank of the West is part of another trend in which banks are loath to conduct expensive, time-consuming core banking upgrades and yet do want to move toward the idea of an "omnichannel," offer some services in real time, and be able to introduce new features quickly, all of which call for modern, componentized technology.
Armistead would not share what the bank spent on this upgrade. "We don't necessarily look at return on investment on a project by project basis, we look at a macro level, how customers' behavior changes based on digital adoption," he said. "What we know and see is the more engaged they are in the digital channels, the more engaged they are with the bank," which leads to profitability.
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