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Bank of America

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Nabduan Duangmanee

on 29 October 2014

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Transcript of Bank of America

History and Development
Financial Crisis
ฉCompany Timeline
Market Size and Customer Adoption
Turmoil at Bank of America
Mobile Banking
BANK OF AMERICA : MOBILE BANKING
Technology
U.S. Mobile Banking Market
BANK OF AMERICA
U.S. Mobile Banking Market
Sunil Gupta and Kerry Herman
mortgage company Countrywide
Founded as Bank of Italy
Change name to Bank America Corporation
Acquire Fleet Boston
Acquire Credit Card giant MBNA
Invest in management of company US trust
1904
2004
2006
2007
2008
2009
Meril Lynch
Served over 53 million customers and small business
Located of 6,000 banking centers and 18,000 ATMs
Held No. 1 position in online and mobile banking
BofA Business (2009)
Retail Banking
Global wealth managament
Middle Market Lending
Large corporation lending
Global treasury services
Investment banking
Subprime : 2008-2009
Consumers and businesses reined in their spending
Result in Credit Freeze
Some Bank must allow waiving ATM Fees and offer greater access to the Bank
Customer choose Bank based on traditional criteria

1.Low account minimum
2.Competitive rates
3.Convenient locations
Choosing Criteria
The Merrill Lynch acquisition
The bank's 4th quarter losses
The rumors spread that the bank will be nationalized
Thus, BofA's stock trade at lowest price in 20 years
Introduced in 2007
Transaction Cost (2009)
Channel differentiate to engage customers
Mobile Banking
: $0.10/transaction.
: Expect to drop to $0.03-$0.04
as online transaction
Interactive Voice Response
: $0.13/transaction
Call Center
:
$0.39/transaction
ATM
: $0.16/transaction
Branch
: $1.34/transaction
Mobile Messaging
Mobile Internet
Mobile Apps
- Working across all wireless operations and require no software installation

- Text-based and limited to 140-160 characters per message
- Effectively connected mobile users to a bank’s website through WAP and browser
- Allowing users to locate bank branches and ATMs through GPS
- Expected to grow from 10%(2008) to 46%(2012)
- Need a data plan, concern to browser speed and screen size problem
- Development cost
1 Basic: $40,000 to $50,000
2 Complex: Several $100,000

Market Size and Customer Adoption
Mobile Payment
Improvement of Mobile Banking
1.Mobile devices
2.Network
Increasing interest in Mobile Banking less than other Banking Channel
According to the survey(2009) 60% of consumer currently not use online Banking but interested in using Mobile Banking
Early 2010, Wells Fargo allow customers to sign up the service regardless of online usage.
3.Better features
4.Increasing in awareness of users
Preferred Banking methods
1st : Online Banking : 25%
2nd : Branches : 21%
3rd : ATM : 17%
4th : Mobile Banking : 1%
Primary reasons indicated by consumers not using Mobile Banking
1.Limited value of Mobile Banking
2.Security concern
3.Cost of data access
1
Local Mobile Payments
Contactless payment
Substitute for credit and debit card
Save customer from extra step in punching pin number
In 2009, was early stages of development in the U.S
3
Allow an individual to send money to another person
Large opportunity from global remittance market where funds are transferred nationally and internationally.
Provide the nonbanking population with access to modern financial services.
Expect to grow market expected to grow more than 1% by 2014.

Person-to-person (P2P) payment
2
Mobile Commerce
Payment of goods and service when merchants not locate proximity
Firstly used in Ringtone, virtual goods and games
Mobile operators enabled payment to their mobile bill
U.S market expectation, virtual goods value $677m(2009) to $2billion (2014)
Mobile Banking at Bank of America
the mobile initiative
“there are four people born every second but there are 32 mobile phones sold every second” Douglas Brown, senior VP
made the case for mobile banking to senior management of BofA in early 2006
1.unprecedented convenience to users
2.build our brand
3.increase customer satisfaction
4.increase retention rates
5.reduce costs significantly


2006 - test its mobile banking service
2007 - controlled launch in Feb 2007
nationwide launch in May 2007
BofA believe that
building mobile apps for several devices (iPhone, Android etc) is expensive and for now reaches a small market, they believe its better to start small but with a rich customer experience
Mobile Banking at Bank of America
early results
Coincided with the launch of the iPhone (2007)
within a year over 1M active mobile user
BofA has the first banking app for iPhone (2008)
1st quarter 2009 = 2M; 3rd quarter 2009 = 3M
Jan 2010 = 4M users
99% of BofA mobile users viewed account balance
90% viewed transaction level detail
15m location searches annually
$10B in annualized money movement through bill payments and e-bills fund transfer
35% of the market share in this segment = leader
most active usage however is among debit cardholders
improve the bank’s perception as innovator
improve satisfaction to customers greatly

Mobile Banking at Bank of America
early results
Mobile Banking at Bank of America
lessons from online banking
beginning there was a charge of $5.95 to use mobile banking but consumers didn't adopt it citing reluctance to try new technology, monthly fee, concerns over security, and the burden of signing up
study conducted by BofA between 2003-06showed that retention of online banking customers was much higher than through other medium
BofA manager, “once a customer has entered all his or her pay information, and used online banking for a while to manage accounts, s/he is far less likely to leave to go to another bank

Mobile Banking at Bank of America
the future
expand to SMS
Jen McDonald, head of the BofA digital marketing group, SMS is likely to increase cost it would also expand the mobile market for BofA
some challenges are
1.integrating with existing channels
2.keep improving security to build customer trust
3.hard to track customers’ mobile transactions
Mobile Banking at Bank of America
Digital Marketing - Mobile
Mobile Banking at Bank of America
Mobile Marketing:
- Provide banking services
- New channel for advertising and promotion

Mobile marketing Challenge
:
- Keep the Right Balance between Customer Service and Promotion

Using mobile marketing as a part of integrated multiple-channels campaigns, the mobile marketing budget represented less than 5% of the overall digital marketing budget for BofA.

Mobile marketing campaigns took several forms:
1.Special offers through SMS
2.Location-based marketing
3.Interactive campaigns with outdoor media
4.Display Ads on mobile devices
Digital Marketing - Mobile
BofA done the experimental between the Email and Mobile.
The result is mobile got a much higher click-through rate than email

>>>>>
5-6 times
Mobile Banking at Bank of America
Digital Marketing - Online
Online marketing budget spends significantly more on graphical display ads
for integrated programs

Online Marketing Challenge:
Finding the optimal mix as cost and effectiveness of online media varied

Online marketing includes

1.Search and display ads
2.Video sites - YouTube and Hulu
3.In game applications for X-Box and other systems
4.Email marketing

Mobile Banking at Bank of America
Digital Marketing - Online
There are multiple effective ways of advertising as following
1.Click-through rate
2.Cost per action e.g. how many checking account were opened
3.Survey
4.Test-control of experiments
5.Econometric studies
Mobile Banking at Bank of America
Digital Marketing - Onsite
Onsite Marketing
“Goal is to get the right message to the right people”

Onsite Challenge
Ensure the effective use of channel without over saturating consumers with messages

Onsite Marketing includes
1.Bank’s website
2.ATM

These two are provided ample opportunities for marketing and cross selling.
Mobile Banking at Bank of America
Digital Marketing - Social Media
Social Media
The important is to balance it against the conservative culture of large national bank

Social Media Challenge:
Balance social media against the conservative culture of a large national bank

Social Media includes:
1.Facebook
2.YouTube
3.LinkedIn
4.Twitter
Mobile Banking at Bank of America
Looking Ahead
BofA continued looking for new technology to make banking easier, faster and more convenient for customer

In short-run
Increase functionality of apps ?
Build new apps or refuse to add complexity to our current app ?

In long-run
How do we position ourselves in this fast changing industry ?

Nabduan D. ID 5520212002
Phornpat R. ID 5520212004
Omar N. ID 5520212005
Neeranuch NG. ID 5520212006
Group Members
Mobile Banking expand mobile payment service market
1st launch in Singapore 2001 popular among Asia and Europe
In 2009 U.S market immature but show sign of rapid growth
Bank of America-Mobile adoption
over time
Annual Mobile Banking Transaction (U.S)
Mobile Banking Users
(U.S)
Full transcript