Voices: the CMB Blog

Imagine a company whose principle mission is to treat clients fairly, one that operates, not at low-cost but “at-cost,” and is beholden only to its clients—not Wall Street or wealthy shareholders. At a time when a social movement, based largely on deep displeasure with the financial industry, has exploded across the country, these are very attractive attributes.

Vanguard, doesn’t need to imagine that company, it’s been operating as a client-owned investment management company since 1975. But, to spread the word about their offerings and what differentiates them from other firms, they needed to get creative. TV, print, and social media all have their place, but explaining the “at-cost” concept isn’t easy to do in a static ad or 140 character tweet.  Moreover, when you are owned by your clients, spending tens of millions of dollars on an expensive TV campaign runs counter to your mission.  And so the Vanguard At-Cost Café was born, a traveling coffee truck, serving investment information, and coffee at-cost…for 28 cents!

Today, I grabbed 84 cents and two of my colleagues to check out the Café for myself. Aside from the almost irresistible allure of 28 cent coffee, the At-Cost Café is an excellent example of how a company can make an impression when so many of us have become expert at tuning out ads. Vanguard did this by connecting one of the most appealing, but least understood, aspects of their company to a concrete, easily grasped concept like really, really cheap coffee.  In addition to the coffee, Vanguard had baristas, video monitors, QR codes, and printed materials readily available to further enlighten the many thankful coffee drinkers about the company, its values, and its financial offerings in more detail.

The At-Cost Café is a success because it feels like much more than a marketing gimmick.  As the company described the effort, the Café is: "...a part of Vanguard’s ongoing effort to educate investors on the impact of investment costs, the At-Cost Café will be touring select cities to demonstrate how investors can save thousands of dollars simply by paying attention to the price tag on their investments." From my perspective Vanguard accomplished this mission and raised the bar  for connecting with customers and prospects by being innovative, straightforward, and informative—that and 28 cents will get you way more than a cup of coffee!

Posted by Jim Garrity. Jim Garrity is VP of CMB's Financial Services practice, never wears blue jeans to work, enjoys a reasonably priced cup of coffee, and always makes a point to ask "What Would the Dowager Countess Do?"

As we prepare for Super Bowl XLVI we thought we'd share, once again, Jim Garrity's tips for picking Super Bowl Squares. Originally published 4/4/2011.

This summer, New Corp’s alleged hacking of celebrity and crime victims’ mobile phones ignited a fire storm around mobile security. Closer to home, the dark side of online convenience wasn’t news to the millions of customers who’ve had their passwords, email, social media accounts, and credit card information hacked. What has received less attention in the U.S. are the privacy issues and risks that stem from burgeoning mobile usage, particularly mobile banking. This spring CMB along with iModerate asked 1,461 Americans over the age of 18 to share their mobile banking habits; the findings reveal consumers’ concerns about mobile privacy.

Data breaches are uncomfortably common, with over 13 million customers falling victim in 2011 as of September. While having an email account compromised may be frustrating, time-consuming, and embarrassing, the thought of financial information in the hands of hackers is the stuff of nightmares.  The vast majority of major banks offer the convenience of online banking, and the growth of smartphone ownership has made mobile banking increasingly popular. According to CMB, over half (52%) of smartphone owners use their device for banking activities including checking account balances, transferring funds, or purchasing stock. Nearly 68% of those under 35 use mobile banking compared with 41% between the ages of 35 and 49, and only a quarter of those over 65. The difference in mobile phone usage by age is consistent with lower use overall by older smartphone owners, who are less likely to take advantage of the array of mobile capabilities than younger users. 

Mobile bankers and non-mobile bankers alike indicate feeling more concern (54%) over personal privacy when using smartphone “apps” for banking than when using a personal computer.  The feeling is unsurprisingly more pronounced among non-mobile banking smartphone owners. A look at motivations behind the lack of use reveals real concerns about mobile privacy and security from smartphone users across the board. As one respondent noted:  “I do not want to do any banking on my phone, at all. Too many security risks…Lose my phone and all my info is cached…phones are easy to access and mine data out of,” Female, 30-34.

Forty-seven percent of smartphone users, who did not use their phone for mobile banking, expressed concerns about privacy (having location tracked by mobile devices, or wireless carriers). Nearly the same percentage (49%) noted security concerns (identity theft, malware, viruses) as reasons not to bank with their phone. Privacy and security concerns aside, half of non-mobile bankers said they preferred to do their banking in person or online. Said one respondent, “I am comfortable with my desktop, my firewall and security system, etc. Plus, in general, I am more productive and faster on the desktop,” Female, 55-59.

The fear of security and privacy breaches is powerful, 71% of smartphone users who don’t use mobile banking say they are highly unlikely to start within the next six months, 86% say they’re unlikely to begin investing on their device. But there is a bright spot for mobile app designers: of non-smartphone owners who plan to buy a device in the next 6 months, nearly 40% said they’d be “highly likely” to use their phone for banking.

So what is the takeaway for the banking and mobile industries?  For some, concerns over security and privacy may always trump the ease and convenience of new platforms and devices; banks and mobile providers must still actively address the reasonable privacy and security concerns of their customers to establish trust among those who may be wary. Banks who can deliver new product and service bundles that satisfy these very real concerns about mobile security will gain the trust, and ensure the growth, of their mobile banking customer base.

Posted by Jim Garrity. Jim Garrity is VP of CMB's Financial Services practice, never wears blue jeans to work, and loves the convenience of banking.

 

Download our recent Consumer Pulse report: A Consumer Perspective on Mobile Banking. It looks at how smartphone and tablet owners are conducting mobile banking and transactions on their mobile device.

Last week we released our latest CMB Consumer Pulse study shedding light on consumers’ perspective around mobile banking. The most interesting finding to me is around where the new growth will come from in this market and it’s not from current smartphone owners.

Among those who have a smartphone, but aren’t conducting mobile banking…they aren’t likely to start anytime soon –mainly due to security concerns or the fact that they just don’t value the convenience. On the other hand, of those likely to buy a smartphone, many (about two in five) are likely to begin mobile banking once the phone is in their hands. 

The reality is mobile banking among current smartphone owners has essentially plateaued.  For the most part, people with experience using these devices have already made up their minds.  Is it possible to convince them otherwise?  Maybe, but why not go for those consumers who are ready and willing, just not able, unless of course banks give them to tools they need…

There’s a group out there that’s ready to bank on their smartphones in the very near future – no questions asked.  Given how affordable smartphones have become (you’ve seen the Apple commercials for the $50 iPhone 3GS), it’s worth considering partnered promotions to draw new smartphone buyers to the bank.  

Instead of focusing on the smartphone/tablet owners who have just not bought in to mobile banking, why not go for the lower hanging fruit and focus on those that have bought in but need the technology to make it happen?

Posted by Jim Garrity. Jim Garrity is VP of CMB's Financial Services practice, never wears blue jeans to work, and loves the convenience of banking.

 

Download our recent Consumer Pulse report: A Consumer Perspective on Mobile Banking. It looks at how smartphone and tablet owners are conducting mobile banking and transactions on their mobile device.