As it charts its course in mobile banking, Ameriana Bank faces competition in its eastern Indiana footprint from much larger banks that have been offering mobile banking for years, such as JPMorgan Chase & Co. and PNC Financial Services Group Inc.
"We're going up against all of the mega banks, particularly in our Indianapolis market," says Deborah Bell, senior vice president and chief information officer of the New Castle, Ind.-based bank. Ameriana has more than a dozen locations and faces competition form Regent Bancorp Inc. and Fifth Third Bancorp, which have made substantial moves of their own into mobile.
To compete with the likes of Chase, which has filled the airwaves with a national ad campaign supporting its remote deposit capture service; and PNC, which has generated buzz around the market with its mobile wallet, Ameriana has relied on low or no-cost venues to draw attention to its foray into mobile.
"We married our mobile app to our social-media strategy," says Jerome Gassen, CEO of Ameriana, which is active primarily on Facebook. "Most of our 'friends' are also active on Facebook and on our Web-banking channel, and that helped contribute to quick early adoption."
In about three months, about 10% of the bank's customers have downloaded the app. That is behind national mobile-banking penetration, which Javelin Strategy and Research recently reported to be about 30%. But Gassen says the app, which is available on Apple Inc. iPhones and Google Inc. Android devices, is growing quickly.
Ameriana is focused on speed to market as a competitive advantage and is relying heavily on a mobile-banking technology platform from Malauzai Software Inc.
Malauzai builds interfaces to the bank's core banking system and to third-party processors to support bill payment, person-to-person funds transfers and mobile check deposit. The bank is also in the midst of a five-year initiative to upgrade its core platform to ensure the institution can deploy new integrated services such as mobile banking quickly. The bank's executives discussed these programs in a recent interview.
How do you see the opportunity in mobile as being different from the web?
BELL: Mobile banking is evolving faster than online banking now in terms of how it can be used to deliver new kinds of financial services, so there's more opportunity to grow. Online banking is a 'been there, done that' sort of thing. With mobile, you can quickly add a number of new services such as RDC and 'knowledge-based services,' such as answering customer queries in real time while they are on the move.
Beyond social media, how are you pushing mobile banking to consumers?
BELL: We've done some in-branch marketing, and are making sure that everyone can get comfortable with using mobile banking. We make sure that the staff who handle in-bound calls are smartphone users, for example. We are also taking advantage of the buzz around mobile technology; consumers are demanding mobile banking.
How have you tackled security concerns, which are often cited as an inhibitor to further adoption of mobile banking?
BELL: I'm a little reluctant to say specifically what we're doing because it can provide a guide for hackers and other crooks. But we are using layered security that's an extension of what we were doing online. The key here is 'layers' of security as opposed to just one (level or mode of security protection).
GASSEN: We have also formed a risk-management committee at the bank that assesses any new product against any and all risks. Our mobile app was fully vetted against what we believe is the risk for a bank our size and have built our firewalls and protections as such.
You've mentioned peer-to-peer transactions and personal financial management as useful products to include in mobile banking. Are you also interested in contactless payments?
BELL: In our market, there's not too much of a market yet for contactless payments. The merchants haven't yet adopted the point-of-sale technology (such as Near Field Communication readers) that are necessary to support mobile payments. If the merchants were willing to accept contactless payments, we would be all over that.
How are you planning to use GPS or other intuitive technology that that's embedded in smartphones?
GASSEN: I've read about the various tracking software that's available, and at this point I'm really not that anxious to use GPS or similar technology as part of marketing, telling people who are entering a branch that we have a special offer at the branch at that time, for example. I don't think that consumers will be comfortable with that.
BELL: I also think that makes people nervous. One thing that we are interested in is using analytics to help deliver the knowledge-based product that we spoke about earlier. We could use preferences or tailor what we put on the app to prior knowledge. For example, we could put a loan application on the screen for someone who asks about a certain type of loan.