While BOA launched their mobile app platform, Chase took a different approach going after SMS text, which was cheaper to build and could reach more customers. Ignoring what Chase had done altogether would be a huge mistake for BOA. BOA strategically went after launching a mobile app to the 10% of their customers who owned smartphones, but decided against launching SMS text to the 80% with cell phones, as they felt SMS would likely increase their costs and tax their call centers. Still, BOA would be foolish not to compete with Chase in this area now as they can bet Chase is going to compete with them in the mobile app arena. BOA is going to need to compete with Chase and launch a SMS text option or offer something even better in order to compete with other banks that offered this option. If they do not address this, they risk losing some of their customers to others in the marketplace that do have this service.
While creation of the online and mobile banking applications can require high capital investments, on the plus side these are the least costly banking channels, in the long run transaction costs run in the pennies compared to costly ATM and branch interactions which can cost .16-1.34 per transaction, respectively. These platforms also provide opportunities for advertising and promotion, enhancing the brand and establishing the bank as an innovator in the industry.
The leaders of BOA have some serious decisions to make for the future of the bank around their mobile strategy. In 2010, the users of the mobile app accounted for about 10% of their customers and had over 4 million users. BOA was enjoying 35% of mobile app market share and other business unit leaders in mortgage, credit card and investment services wanted to explore the possibility of expanding the mobile app platform so they could capitalize on that same success. Some of the challenges Brown brought up with adding these services to their existing app was that others had gone down this path, it could add a layer of complexity, causing the app to become unreliable which would have negative consequences. Additionally, they would need people to build the apps and that would take critical resources off of other important projects. There were three options BOA was entertaining:
1) Increase the functionality of the current apps offered by providing additional features to the current apps without building new apps:
Increase customer engagement over the already successful mobile apps.
Decrease in customer churn
Streamlined apps are necessary in order to be successful.
Customer immersion in ecosystem and