Retail banks have well and truly got on the mobile
banking bandwagon. The saturated iPhone app market has meant new
entrants have to work twice as hard to succeed. Farah Halime
reports on the success and the challenges of some of North
America’s biggest iPhone apps, including Toronto Dominion and Wells
Fargo.
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“We don’t even know how
many iPhones are in Canada,” said Matthew Cram, a spokesperson for
Toronto Dominion (TD) Bank. It is not a great start for the
bank.
“The challenge is how many iPhones
have been sold in Canada. I don’t have that data [and] it’s tough
to come by,” Cram said.
Cram claims that the total number
of iPhones sold in Canada is unknown and the Apple press office
confirmed it does not break down statistics by nation but announces
figures worldwide.
Brandon Mensinga, a senior analyst
at consultancy IDC, told RBI: “You would think that TD, being a
large corporate company, would spend the time and effort to qualify
the opportunity with actual numbers. So that is slightly
surprising.”
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By GlobalDataSmartphone penetration in Canada
has jumped dramatically in the last quarter to 45.6%, compared to
the preceding three quarters when the corresponding figure was less
than 30%.
“That’s the highest we’ve ever
seen,” he said.
TD Bank, the sixth-largest lender
by branches in North America, launched its iPhone application, or
app, in April and has been downloaded 275,000 times since. The app
averaged 10,000 downloads a day in its first week demonstrating the
pent-up demand for mobile-based services in Canada.
It follows in the footsteps of the
major US banks’ iPhone apps and offers the usual advantages:
flexibility of being able to bank “on-the-go”; the ability to check
balances, pay bills and transfer funds among other transactional
services and an ATM locator.
However, TD said its unawareness of
the Canadian smartphone market makes it difficult for the bank to
set targets.
“It’s tough to say if we’re hoping
for a million, two million downloads when we don’t know the
percentage of Canadians who have a smartphone,” Cram admitted.
He added, however, that the bank
expects about 10% of its 3.6m online customers to download one of
its apps (the bank also launched an app for the Blackberry and
Android platforms in June).
“It’s the same process, the same
log-in information [and] taking our online banking portal and
moving it to the smartphone. Those are the ones that have migrated
so far,” Cram said.
TD fares well in Canada, however,
where it tops Apple’s iPhone ranking for the most downloadable
financial app, with rival Canadian Imperial Bank of Commerce coming
second (at the time of going to press).
It is even a serious competitor to
Bank of America (BofA) and JPMorgan Chase’s apps in the US top ten,
ranking number four.
Leading the
market
BofA claims to be the market leader for mobile banking in the US
with over 5m users. But rivals treat this with scepticism.
One person involved in the
m-banking industry said: “BofA throws out a gazillion numbers which
people in the industry look at and say ‘that’s just them spouting
off again’. They may have some big numbers but a lot of it may be
smoke and mirrors.”
BofA did not disclose iPhone app
downloads or targets for the end of the year.
Having launched its app back in
2007, it is one of the most established apps on the market, making
its top position unsurprising. BofA’s network is also much larger
than TD’s, with a customer base of 59m in the US alone (including
small business customers) compared to TD’s 18m customer base
worldwide.
“We obviously don’t have the same
number of customers as BofA,” Cram said, adding that this has an
impact on the number of downloads.
Thomas Kelly, a spokesperson at
JPMorgan Chase agrees. He said it is not surprising the big US
banks had captured the largest number of downloads because “we have
far and away the most customers”.
Chase has 5,159 branches, compared
to TD’s 2,100 in North America.
“[TD] are not really a competitor
of ours. We’re in 20 other states they’re not in as they’re mostly
in the New York metro area. So your choices [for an app to
download] do not include [TD] in a lot of these states,” Kelly
said.
Chase did not break out a specific
figure for the number of iPhone downloads.
Another success of the iPhone app
market is Wells Fargo, which has around 3.4m m-banking users and
ranks a solid 7 on Apple’s top 10 financial apps.
It has launched extra apps for
Android, Blackberry, and Palm smartphones and was the first bank in
the US to offer text banking to customers at the beginning of the
year.
However, the level of competition
in the market has beaten some banks.
A bank obviously missing from
Apple’s US top ten is Citi. This is not a shock considering the
bank’s dismal m-banking performance. It was an early advocate of
m-banking but has continued to trail behind its rivals.
Last month, it was also the subject
of criticism when it was discovered that the bank’s iPhone app had
a security flaw that saved personal account information in a hidden
file. The fiasco impacted the security of around 117,600 customers
who have signed up to the app since its March 2009 launch.
The next six months could see
another flurry of “new and improved” app additions as banks attempt
to out-do each other. It may even come down to how “cool” an app
is.
Chase’s quick deposit app allows
users to send a picture of their cheque without needing to visit an
ATM.
“We have a lot of customers and we have a cool app,” Kelly
said.
