Mobility Transforms the Customer Relationship

By Samuel Greengard  |  Posted 2012-02-09

A few years ago, it would have been next to impossible to imagine a bank without branches or an insurance company without walls. However, these days it’s difficult to keep up with the velocity of change, particularly in the mobile arena.

“When you look at the number of connected devices—smartphones, tablets and even cars—it’s apparent that there are huge opportunities and challenges associated with today’s customers,” observes Neff Hudson, vice president of emerging channels for financial services giant USAA.

Few large companies have embraced mobile technology as passionately as USAA. The company has introduced robust apps for iPhone and Android smartphones, as well as for the iPad. Consumers can snap a photo of a check and deposit it immediately at the firm’s bank, file a claims report through its insurance service, and handle myriad other functions that were once relegated to paper and physical locations.

“Consumers are using mobile devices in new and unanticipated ways,” Hudson says. “Developing mobile apps is no longer just an option.”

USAA isn’t alone in its adoption of mobile technology to improve customer relationships. A growing number of companies now recognize that customers expect—perhaps demand is a better word—apps and tools that enable them to tap into information from anywhere at any time.

Consumers are also demanding more advanced transactional tools that tie into social media services, GPS and other features included with these mobile devices. It’s a moving target that requires an organization to possess a clear strategy, strong application development skills and an IT infrastructure to fully support customer mobility.

David Nichols, America’s leader for CIO Services Practices at consulting firm Ernst & Young, explains it this way: “Companies face substantial challenges in developing capabilities and apps for multiple platforms and providing the features that consumers desire. There are form factors to consider, operating systems to manage and interface issues to address. Today’s mobile apps must be intuitive, yet remarkably powerful.”

What does it take to build a mobile platform that meets the needs of today’s consumers? How can an organization determine the features and capabilities to include, and what tilts an app over the edge of usability? Also, how can a company balance IT resources in a world where mobility matters, but the Web and phone still count?

There’s no template for success, but a best-practices approach is paramount. “Mobility must be at the center of a company’s business strategy,” says Fernando Alvarez, president of mobile solutions for consulting firm CapGemini.


Banking on Mobility

One thing that makes today’s business environment so challenging is that customers increasingly expect to use a mobile device of choice to get desired information or initiate a transaction. If a company wishes to remain competitive, it must provide a robust, streamlined and user-friendly experience that spans multiple devices, including tablets, smartphones, laptops and other mobile technologies.

“It’s all about the user experience and optimizing content for specific devices,” says Andrew Borg, senior research analyst for wireless and mobility at the Aberdeen Group. “The user experience for mobile interaction is fundamentally different than it is for desktop and laptop PCs.”

Consequently, an entirely different business and technology focus is required. “It’s not acceptable to simply port a Website or desktop application to a smartphone,” Borg adds. “Apple has set the bar extremely high by creating intuitive and nontechnical interfaces.”

Technology adds to the challenge: Today’s devices rely on an array of sensors—such as GPS and accelerometers—to create possibilities that simply aren’t possible on a desktop computer. Location-based services, social networking and motion detection all add to the mix. When these features are incorporated into a touch-screen interface and combined with a phone, the potential to interact with customers in new and meaningful ways grows exponentially.


Self-Service Channels

That’s a concept that USAA’s Hudson understands. The company introduced a Website in 1997 and went mobile in 2007. Today, about 90 percent of its interactions occur through these self-service channels. The platform is supported by a mainframe running IBM WebSphere and an Oracle database.

Last year, the firm handled about 183 million customer contacts through its mobile channel, according to Hudson. “We project that the mobile channel will become the primary point of contact in terms of total customer interactions within the next two or three years,” he says.

The company has approximately 100 dedicated mobile developers writing and updating apps for the iPhone, iPad and Android operating systems. It also has a BlackBerry app and supports Windows Phone 7.

“Our goal is to redefine processes and provide simpler and more powerful ways for customers to interact with us,” Hudson explains. For example, a smartphone accident report and claims app lets customers snap a photo and submit a claim directly from an accident site. The app can also send geographic information system (GIS) data to a towing service and display nearby car rental locations.

USAA, which operates only a single brick-and-mortar bank branch in San Antonio, was also the first major bank to support photo deposits. A customer snaps an image of a check with the smartphone and submits it to the bank via the mobile app. The money is instantly deposited to the customer’s account.

“USAA strips out the labor and expense related to processing the paper, and the customer doesn’t have to mail the check and wait three days for the deposit to show up,” Hudson notes. Last year, USAA Federal Savings Bank processed $6.4 billion in deposits through this app.

The app also handles myriad other capabilities, including displaying loan and credit card balances; homeowners and auto insurance policy information; Home Circle and Auto Circle buying services; shopping services; retirement products and information; ATM and taxi locators; and a communities app that lets users view what others are posting about USAA on Facebook, Twitter and YouTube. The company is now exploring the idea of adding a digital wallet that will use near-field communications (NFC) chips in smartphones.

Hudson understands the importance of providing choices. “The goal is to build a robust cross-channel experience that lets customers interact in a way that makes sense for them,” he says. “We’re careful to keep in mind that not all transactions are created equal. There are times when the phone or a Web browser is better.

“We don’t want to take the myopic view of thinking that mobile is the only way to go or that we have to push customers to use it. The goal is to provide the best solution for a given situation.”


Weathering Change

The most successful companies in the mobile space understand a basic tenet: Apps and features must wrap around an organization’s brand and core competencies to fully engage customers and deepen the relationship with them.

“It’s not enough to simply offer an app to prove that you’re current and contemporary,” Aberdeen’s Borg says. What’s more, it’s important to “maximize the customer experience by taking advantage of the technical capabilities of the device but not overengineer apps.”

It’s also important to understand how, why and where customers use mobile devices to connect to data and how these connection points change basic business interactions and behavior, Ernst & Young’s Nichols points out. For example, do customers who use an app handle a greater number of transactions on their own and rely on the phone less? Do they spend less time actually perusing products and shopping from a mobile device?

Unfortunately, “few companies put the data that’s available to use in a way that helps them improve apps and boost customer loyalty,” he says.

Another company that has dived headfirst into the mobile revolution is, a leading provider of forecasts and weather reports. The 50-year-old firm—which delivers data to television broadcasters, businesses and consumers—provides forecasts through the Web, smartphones and tablets, including iOS, Android, BlackBerry and Windows Phone 7.

Every day, somewhere between 8 and 10 million requests originate from mobile devices, and the numbers are rising rapidly, says Christopher Patti, director of technology.

The company, which has about 50 app developers on staff, offers different versions of apps for various devices to better match the needs of users. For instance, AccuWeather presents BlackBerry users—who tend to be more business-oriented—with an interface that’s more travel-centric. iPhone and Android users, on the other hand, view weather forecasts and events that are more focused on local conditions.

“We use a couple of research firms that provide real-time feedback about customer behavior within these apps,” Patti explains.

All the apps provide a high level of personalization and exploit the specific features and strengths of a particular device. For example, iPads display more interactive weather maps than iPhones because they provide a larger viewing area.

In addition, AccuWeather provides automatic syncing for saved locations through Apple’s iCloud—so that a user can view desired content seamlessly across devices. There’s also integration with Facebook so family and friends can share weather news.

AccuWeather offers both free and paid versions of its apps. For the former, the company derives revenues through advertising that’s tied to the user’s current location—without specifically identifying the user’s phone.

“We’re able to pass weather data to ad networks and generate hyper-local advertising that displays local businesses and ties the ads into current weather conditions,” Patti explains. “For example, if it’s raining, you might view a Michelin ad, or if it’s snowing, you might see a Toro ad for snow blowers.”

The company relies on Dell PowerEdge M610 blade servers and a Dell Chassis Management Controller running on Microsoft Windows Server 2008 and 2003, as well as Dell EqualLogic PS Series SANs It also uses VMware ESX Server to improve utilization through a virtualized environment.

The firm’s data center in State College, Pa., handles 100 percent of the traffic. AccuWeather relies on two content delivery networks to distribute data and improve performance.


Building Lasting Connections

Other companies are putting mobile technologies to work in innovative ways. Hotel chains—such as Hyatt and InterContinental—are using iPads for everything from checking in guests to providing concierge services.

Health care providers, such as RehabCare, use e-forms, questionnaires and visual aids on tablets to interact with patients. And other organizations, from real estate agencies to retailers, are using mobile devices in the field or in stores to display products, properties and more.

As organizations roll out mobile apps and tools, they find it necessary to build an IT infrastructure that supports the environment. Ernst & Young’s Nichols says that companies must find a way to shift development and IT resources to mobile tools—particularly the iOS and Android platforms—but continue to support the Web and traditional channels.

He adds that a cloud infrastructure can provide a solid foundation for mobile resources by boosting flexibility, scalability and agility. It can simplify data management and help an organization use resources more effectively.

CapGemini’s Alvarez says that IT executives must accept the fact that mobility is a critical element of any business strategy and that consumers now control content delivery. Best-practices organizations, he says, connect business objectives to app usability, IT infrastructure, security and governance.

“The most important thing to remember is that mobility is not a technology play; it’s a solution play that revolves around things like marketing, sales and support,” Alvarez says.

Aberdeen’s Borg adds that, in the end, a consumer-facing mobile initiative must wrap around an organization’s core competencies and value proposition. “This limits the universe of possibilities and features from the start,” he points out. “An application must deepen the relationship of a brand or service.

“It isn’t about differentiating yourself for the sake of standing out. It isn’t a 'sky’s-the-limit’ proposition. It’s all about making things simpler and better for the customer. When mobility is done right, the company and the customer come out ahead.”