Mobile banking loyalty strategies may shift to shopping apps
2010-07-26
At this point, many major banks have already deployed a mobile banking application. But the next phase of customer loyalty solutions through mobile banking may not involve payments or account balances, but bank-branded mobile shopping applications.

Bank Technology News reports that many major banks, such as Citigroup and U.S. Bank, have either already started developing their own dedicated shopping apps or already deployed them. These applications - separate from the banks' traditional mobile banking applications - use the GPS locator ability of smartphones to allow consumers to see where they can get discounts in close proximity to where they already are.

For example, Citi's Citi Shopper application allows consumers to see special offers that are available for their account, and then search to find where those products may be sold in the local area. The application can even be used by non-Citi members to help find deals and create loyalty among shoppers who aren't even customers yet.

"This is a race to establish strong consumer engagement," Bob Hedges, principal at bank advisory firm Mercatus, told the magazine. "It's important to have your consumers engaged with you mobile-ly; whatever gets them to do that is a good idea."

But as the applications are being developed, FIs also need to take into account how much time and resources they are willing to contribute toward the effort. BTN reports that many banks are working to develop highly-detailed applications that may be more than customers need.

That level of detail means that banks are spending more money developing applications that won't be around for long periods of time. While many traditional loyalty programs are self-sufficient once they are developed, mobile and online banking applications need almost constant redesigns to maintain relevance.

"Banks need to go into it with a view of what is the useful life of the app before it gets eclipsed," Hedges told BTN. "And it's not going to be measured in years, it's going to be measured in months."

Consumers are constantly sifting through and downloading thousands of applications a day, meaning that any mobile banking application - shopping-related or not - will need to work in order remain relevant. Chetan Sharma, a Washington-based mobile research firm, estimates that by 2012, consumers will download 50 billion applications every year.

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