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July 24, 2012

Tablets Are Changing the Consumer-Banking Relationship

HandontabletAnalyst Insight by Michelle Evans, Consumer Finance Analyst

There is a growing market for tablets that goes beyond enhanced communication capabilities or as a tool for viewing multimedia on the go. Tablets also are increasingly becoming relevant as a banking tool.

The number of tablets has taken off since Apple began selling its now popular iPad tablet device in April 2010. The US market has grown from 95,400 units in 2009 to more than 35 million devices in 2012, according to the latest figures from Euromonitor International's Passport: Consumer Electronics. In fact, tablets are predicted to overtake laptops as the dominant form of portable computers in terms of number of units by 2015. Growth will be driven by the increased availability and accessibility of data networks, the expansion of consumer-oriented cloud computing services and the rapid price erosion of hardware. 

Rising Popularity of Tablets

Euromonitor International

Consumer adoption of tablets is increasing rapidly and financial institutions will need to quickly accommodate to this platform. In February 2012, Fiserv conducted a survey of 3,000 US consumers and found that 45% of current and future tablet owners are interested in using their tablet to access financial services.

Consumers are moving beyond using the mobile channel solely for informational purposes, such as checking balances or locating an ATM, to instead using it for transactions, such as bill payments and money transfers. Forty percent of mobile banking users have paid a bill using their mobile phone as compared to 28% in 2010, according to the Fiserv survey. Nearly a third used their mobile phone to transfer money versus 25% in 2010. In terms of which banking services they would like to access via a tablet, consumers in that survey chose monthly statements at 69%, followed by bill payments at 56%, real-time account information at 50% and money transfer between accounts at the same financial institution at 49%.

The growing prevalence of tablets has not been lost on some banking executives. Bank of America, for example, introduced a tablet-optimized app that differs from its smartphone app. This is not a common approach among the largest banks, but it will become necessary that the tablet experience is differentiated from the user experience on other platforms like the mobile device. Consumers will expect the capabilities of the tablet, such as the touchscreen features and graphic display capability, are fully utilized. Applications designed for tablets can't be just the smartphone app but displayed on a larger screen nor can a tablet app be a shrunken version of what a consumer experiences on a laptop.

Citibank NA launched its iPad application in July 2011 to focus on the deeper experience that consumers have with the tablet over the smartphone. Citi has discovered that tablet users have longer sessions than smartphone users on average, which leads to a deeper brand experience. The financial institution focused on finding more visual ways to present the account information versus the standard line by line of data that has appeared in the bank's ledger for years. In addition, Citi took advantage of the tablet's touch and graphic capabilities. Users on the iPad app can view charts and graphics to monitor cash flow and track expenses and read about personal finance and money management. Citi's smartphone app, on the other hand, is much more streamlined with basic information like transactional activity or upcoming payment information. Citi estimates that thousands of customers have signed up for Citi's online banking for the first time via the bank's iPad application.

Although banks tend to organize payments and banking into separate divisions, consumers don't look at the two functions separately. In that similar vein, there needs to be synergy across the entire non-branch consumer experience from the laptop to the smartphone to the ever-growing tablet space. Financial institutions must be prepared to deliver information and the ability to perform actionable tasks across multiple devices.

Of the largest banks, USAA does one of the best jobs at creating an app that tackles these concepts and brings together all their product offerings in their tablet product. USAA's iPad app gives consumers the ability to access retirement, insurance and banking accounts through the same interface. The app also gives the user the ability to store important documents, such as an insurance card or homeowner policy, access customer support or read relevant consumer finance articles. Even though the tablet app can deposit checks, find directions to an ATM or check account balances, the mobile app focuses more on such action-oriented tasks like these rather than information gathering or analysis.

Devices like tablets are quickly changing the way consumers bank. Within a few short years, it will be technology — not employees at brick-and-mortar branches — that will become associated with a brand and the major driver behind bank selection for the consumer.

Follow Michelle on Twitter @mevans14 


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