Q&A with Richard Crone on Mobile Technology Trends in Banking
Richard Crone is a 30-year banking veteran, founder and CEO of Crone Consulting, and one of the industry’s leading experts in mobile technologies. He is also one of the key contributors to William Mills Agency’s seventh annual “Bankers as Buyers” report. Scott Mills, agency president and editor of the 2010 report, recently sat down with Crone to discuss what’s in store for 2010.
Mills: You’ve established yourself as an expert in mobile, especially as it applies to payments and banking. When did you decide that mobile was the future of banking and why?
Crone: Three years ago, the same issues were being raised by bankers that we heard in 1995 when the Internet was coming of age. I’ve seen the movie before, but with mobile the issues are even more complicated because it is not just one channel, but 16 combined into one device. The big difference is that mobile is a cross-channel enabler for customer self-service since it is present within every other channel experience.
Mills: In an ideal world, how would the average consumer use mobile in their everyday life?
Crone: For self-service, payments and opt-in “self-marketing”
Mills: In “Bankers as Buyers,” you mention that mobile banking is growing far faster than online banking. Why do you believe that is?
Crone: Mobile banking “crossed the chasm” in half the time of Internet banking and is projected to grow twice as fast because the device is already in use with no infrastructure lag experienced by PCs
Mills: When do you believe we will see widespread adoption of mobile payments by banks, merchants and consumers?
Crone: Demand unquestioned is not unquestioned: 30-50 percent of consumers are using or considering using mobile banking and early movers are growing 3 to 5 times faster than Internet banking (e.g. Bank of America at 3.8 million, adding 150,000 new users per month)
Mills: Is there a silver lining for the banking industry in this recession?
Crone: Bankers can use mobile to increase their operating margins by reducing costs. Secondly they can use mobile to create new revenue generating lines of business. For example, SoundBite Communications Inc. has developed a new service called Proactive Payments™ that is turning Expedited Payments upside down. This is an opt-in service where the customer receives a call or text message if their remittance has not been received prior to or on the due date. Customers can respond immediately and initiate an Expedited Payment for a convenience fee on the spot. What overdraft protection is for checking accounts, Proactive Payments™ is for bill payment; think of it as customer initiated “underdraft protection.” The service further extends the benefits of Expedited Payment by supplementing an outbound or “push” channel to the existing inbound or “pull” remittance connections points for consumers; and in doing so creates a new revenue generating opportunity for the bank and its serviced billers.
About Richard K. Crone
Richard K. Crone leads Crone Consulting LLC, helping financial institutions, billers, merchants, payment networks, processors, start-ups and investors transform payments from a cost of business to revenue-producing new lines of business.
In his 30-year career in financial services, he has focused on harnessing the technological innovations that have shaped the industry, from the introductions of ATMs, home banking, Internet commerce, and Electronic Bill Presentment and Payment, to today’s Mobile banking and payment developments.
Mr. Crone has helped define the mobile commerce strategy for leading financial institutions, wireless carriers, payment processors, large recurring billers, card issuers, device manufacturers and technology start-ups. Crone Consulting, LLC has performed due diligence on many of the largest M&A deals and tier-one venture-backed investments in online “alternative payments” and the mobile commerce arena.
