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Special Preview: BankMobile CDO keynotes at the QA Financial Forum New York
Retail banking is increasingly dominated by mobile banks. And mobile banking customers are the most demanding and potentially fickle of all customers; their expectations shaped by the millennial lifestyle. So how has New York-based BankMobile, a division of NYSE-listed Customers Bancorp launched in January 2015, achieved a customer base of two million in the USA.
At the QA Financial Forum in New York on November 29th, keynote speaker Dan Armstrong, BankMobile’s Chief Digital Officer, responsible for product and feature development, will discuss how BankMobile developed its core banking platform in five phases of evolution to meet the needs of its tech-savvy customer base.
“We originally launched BankMobile using an off-the-shelf app, but it was clear from very early on that we needed to differentiate more. We wanted to do different things and regain control of our security and user experience. In other words, if we were really going to succeed with BankMobile, we needed to put our money where our mouth was,” says Armstrong who, alongside his then partner, created the software and services division of the bank, which went on to develop a brand new website and app.
Meeting the needs of their customers has not been an easy task, explained Armstrong. Last year, the bank launched a “build your own bank” social media competition, which asked the public to share what they were looking for in a bank. “We listen to our customers, but we have to filter out those ideas that are just hype,” he says. “Take personal finance management (PFM), we tried to launch this as part of our application, but in the end we realised it’s pretty nonsensical. To get a good picture of your finances, you need to include all of your different account information, and it became obvious very quickly that almost no one relies on one single financial institution.” Although the PFM functionality was later pulled from the BankMobile platform, this experimentation of services is just one advantage of having control of your application development, explains Armstrong. “We can test the water with different services, because we don't have a vendor management process to go through; we can afford to play with the concepts more easily than say a larger bank that uses a third-party vendor.”
In-house development means in-house testing
Because all of BankMobile’s applications are built in-house using their own code and team of developers, the testing process is not necessarily an independent step for BankMobile, it is continuous. This is another advantage of controlling application development, says Armstrong; however, it hasn’t all been smooth sailing when it comes to in-house testing. “We have learnt that we can have many in-house capabilities and testing is one of them, but the problem is keeping on top of it. Once the team hits the ground running, testing can sometimes seem an afterthought in the midst of development. There’s always going to be fire to put out, and you need to make sure you have done enough testing and the right kind of testing.”
With BankMobile’s reputation at risk, when it comes to testing Armstrong admits that it is tricky to step back and say enough is enough. “It’s a double-edged sword. We say we can do it, but when the rubber hits the road it’s difficult to ensure that you have enough resources to do everything correctly,” he says. “Admittedly, if you had an independent party doing this for you, you’ve made this investment and you can be confident they are doing their job thoroughly.”
There are certain kinds of testing that you never want to bring in house, explains Armstrong. “We have always used a third party for penetration testing and security testing. We don't have the time or the energy to keep up with all the tech involved here. Having certifications from best-of-breed, independent third-parties help protect our customers and help us keep up-to-date in an ever-changing cybersecurity risk-filled world.”
After entering the market, bringing its development in house, and relaunching its platform, BankMobile is now in phase four of its plan – scalability. So far, the bank has managed to bypass running large and costly advertising campaigns. “We are currently busy launching a 'B2B2C strategy' where we can power partner brands and leverage their distribution networks, while still achieving our mission to serve young, lower and middle-income Americans, and bring fee-free banking to all customer segments.”
Will BankMobile expand internationally? “Our chairman certainly has aspirations for our technology, and after working in a number of different countries, I know this model could really work in emerging markets,” says Armstrong. “We are, however, a US chartered bank only, so we will be looking at creative ways of expanding. Our goal is to build the technology, prove it works and look to roll out that technology across the industry. I think this will be much quicker than getting a charter in another country.”
BankMobile’s onboarding and scoring platform has already attracted the attention of other banks. “We can see that we are already way ahead of what others are doing, and the prospect of selling our technology to another bank as a managed service has got our wheels turning.”
Dan Armstrong will be speaking at the QA Financial Forum New York on 29th November 2017. See the agenda at: www.events.qa-financial.com. If you are interested in attending, please contact [email protected].