This evening I'm pleased to share the details of my interview with Drew Sievers (CEO - mFoundry). To read more about Drew visit mFoundry.com.
Q: What’s your differentiator? What sets your mobile banking solution apart from the competition?
A: mFoundry has the two components necessary to grow:
1) A 3 mode fully integrated mobile banking solution
2) Access to core banking providers
Q: Who are your key clients?
A: Citi, PNC, BB&T, IBC, Zions Bank
Q: Who are you key partners?
A: Fidelity (15 FIs), PSCU (6 CUs), NCR, FirstData, CoOp (8 CUs)
Q: Budget season is just around the corner, and the #1 question bankers want to ask is – What’s it going to cost me?
A: The price of a mobile banking solution depends upon the assets of the bank and their DDA base. The industry average is around $1/user/month - $3/user/month. There are vendors that allow for “all you can eat pricing,” but these are primarily solutions that utilize screen scrapping.
During your price discussions, be sure to confirm that the amount you’re quoted includes all 3 modes. Some vendors price the solutions separately. And, finally inquire about monthly minimums. These will again vary by the size of the institution.
Q: What components of your ROI model have begun to materialize?
A: Currently, the largest savings is due to call center deflection. Our solution has been proven to move customers that repeatedly call-in to the less expensive mobile banking channel. Mobile banking has also been proven to make the clients stickier and less likely to attrite. In the future, the new ROI model will be around expedited payments. This will be a great way to generate revenue.
Q: How many active users do you have across all FI’s?
A: Hundreds of Thousands
Q: What’s your highest client adoption %
A: One client achieved 8% in just 5 months.
Q: What’s your lowest client adoption %
A: We don’t really have any laggards. It has become pretty standard to achieve 10% by the end of year 2, but banks will need all 3 channels to be successful.
Q: What do the demographics of your users look like?
A: We have witnessed heavier usage among the “young” and “affluent.” Smartphone users gravitate toward the mobile web and applications, while clients with other handsets (non-smarthphones) use text banking.
Q: What do the usage patterns look like? Balance, History, Transfers, BP, Locator?
A: Account balance is the “killer app.” Customers with feature phones don’t use the mobile web – they use text banking. Mobile Web adoption tends to mimic application adoption with 90% of users coming from either the iPhone or a Blackberry device. However, application usage is 3-4 times larger:
o Mobile Web – 1/week
o Mobile App – Multiple/week
Q: What security elements are incorporated into your application?
A: The mobile device is already more secure than a laptop, but there are different levels of security within each of the channels:
o Text Banking - Is the most unsecure because it flows across unsecure channels.
o Mobile Web – Is more secure but there are concerns because of spoofing.
o Application – The application is the toughest and the most secure.
Also, be cautious of two-way interactions utilizing a combination of text and links to the mobile browser. This is scary because it trains the customer to expect unsolicited alerts that ask for permission to launch a link where credentials are input.
Q: How likely are biometrics to become a component?
A: Biometics won’t happen in the near future.
Q: How has the iPhone changed your approach to the business?
A: The iPhone has changed everything! It made the system less dependant upon the carriers and allowed bankers to have a direct interaction with the client. Carriers didn’t think they were blocking innovation, but the app store has shown the kind of innovation that can occur when you take away the barriers.
Q: What has been your biggest surprise/lesson-learned over the last couple of years?
A: First, all 3 modes of mobile banking are critical. Second, customers expect solutions from banks not mobile operators.
Q: What big industry development should we expect within the next 12 months?
A: I think the two biggest developments will be expedited bill payment via mobile devices and P2P bank to bank.
Q: What can banks do a better job of to facilitate adoption?
A: You must build it and promote it. The banks that do a good job with promotion online and through the branch do very well.
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