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Regional banks deploy mobile 2.0 solutions to gain ground

Features such as person-to-person payments and remote check deposits were not long ago solely the purview of larger financial institutions and online-only banking enterprises. Today those functions and others are becoming standard offerings for even the smallest community banks as both mobile devices and the technologies that allow banks to reach them become ubiquitous.

“We absolutely feel that we have an advantage in being nimble when it comes to providing services for our customers,” said Michael Butler, president and CEO of First Trade Union Bank, Boston. “We have a much simpler infrastructure that allows us to move quickly.

“We are also able to do some of these things because the costs have come down, making it more affordable for a bank our size.”

First Trade recently relaunched its online banking platform using responsive design and added a host of new mobile features that seek to let customers manage their finances on the go without entering a physical branch. The bank has about $700 million in deposits and has offices and ATM locations in Massachusetts and New York.

Beyond early apps
The new features offered by First Trade and similar offers from other banks reflect an effort by these financial institutions to move beyond their first efforts at mobile, when they launched basic functions such as the ability to check account balances and make bill payments. In some cases the smaller banks are offering even more functionality than their larger counterparts, said David Albertazzi, an analyst at Aite Group.

“The smaller banks and credit unions are relying on tech vendors to make their digital offerings more competitive,” Mr. Albertazzi said. “In many cases, they are offering features that larger banks don’t have.”

Among the features being deployed by smaller banks are things like location-based rewards programs and new tools to combat theft and cybercrime, such as the ability to activate and deactivate a debit card via mobile devices. Smaller banks are also becoming more adept at sending alerts and messages about account activity to keep their customers coming back to the app or mobile Web site.

Person-to-person payments are also gaining traction at small banks, Mr. Albertazzi said. In addition, more small banks are rolling out second-iteration mobile platforms that leverage native smartphone and tablet functions, such as cameras.

Changes at Comerica
Dallas-based Comerica Bank also recently upgraded its mobile offerings for customers with person-to-person transfers, a new application designed specifically for iPads and a feature called Click & Capture Deposit that allows users to deposit checks using the phone in their smartphone or tablet. The regional bank has $63.5 billion in assets and operates physical locations in several states.

“We are seeing a lot of person-to-person payments on mobile, and some very sizable person-to-person transactions,” said Frank Natoli, senior vice president of retail products and skills development for Comerica Bank. “It’s very exciting to see customers using that functionality.”

Similarly, Mr. Natoli said the new ability to photograph checks and deposit them via mobile has been popular with users.

“It’s been surprising how quickly we are seeing adoption, from the very first day,” he said. “It appears as if there’s been some pent-up demand.”

Mr. Natoli noted that the new iPad functionality is native to the iPad, so that the look and feel of the site renders specifically for that device. That leads to a sharp, crisp image on the screen for users, he explained.

Mr. Butler of First Trade said features like remote check deposits via mobile devices serve to wean consumers off of visits to physical bank locations.

“We’re not really trying to compete against Bank of America, for example,” he said. “What we are saying is that branches are not really needed for routine transactions.”

One of the new mobile functions available at First Trade is the ability to transfer funds to and from other financial institutions — a function not offered by many larger banks, said Chris Tremont, senior vice president and director of marketing at First Trade.

With its latest mobile transformation, First Trade also launched mobile banking for its business clients, which makes its online business banking services fully available through the FT Mobile application.

First Trade partnered with Q2, a provider of virtual banking solutions for regional and community financial institutions, to launch the new online and mobile solutions. It worked with ProfitStars, a division of Jack Henry & Associates, for the website redesign.

Customers who use digital banking services are much more loyal to their banks than those who do not, and increasingly those mobile services need to be replicated and even enhanced for mobile, according to a recent Bain & Co. report.

“Customers often cite certain digital interactions as ‘wow’ experiences that exceed their expectations — moments like remote deposit capture, remote bill pay or even well-delivered basic transactions through a mobile app,” said Mike Baxter, who leads Bain’s financial services practice. “Winning in the digital realm, therefore, is critical for improving the overall customer experience.”

Final Take

Mark Hamstra is content director at Mobile Commerce Daily, New York