Partnership Is the Only Way Smaller Banks Can Compete on Mobile

Banks like JP Morgan Chase, Bank of America Merrill Lynch, and Wells Fargo are announcing new mobile features and adding new mobile users every day, but mobile can be a challenge for smaller banks that don’t have the resources of a Wells or Chase.

“It’s almost impossible for us to stay anywhere near-competitive,” Kevin Karrels, digital channel strategy SVP for First Tennessee Bank, told Bank Innovation. This is especially true as mobile becomes “more critical” for banks, according to Karrels.

First Tennessee is dwarfed in asset size and resources by banks like Wells Fargo, which means its ability to fail at a mobile rollout, new feature, or new innovation, is nearly nonexistent. For these more regional banks to have a chance at competition, the only way forward is partnership.

First Tennessee is taking that way forward by powering its mobile app with the mobile platform provided by fintech startup D3 Banking.

“You have to have a single banking platform to have a mobile banking app. [Our platform] provides all the usual services, provides a wide range of payment capabilities—P2P, billpay,” Jeffrey Hale, SVP, sales and marketing for D3 Banking, told Bank Innovation.

Using D3’s infrastructure, First Tennessee customers now have access to what one would term the standard functions of a banking app (including access to P2P services like Zelle, which should be integrated into the app by the end of year or the first quarter of 2018, according to Karrels).

Using this platform also means the bank will have greater access to future innovations like wearables and biometrics. The bank launched an application for Apple Watch at the same time as this mobile app, according to Karrels, but only for basic banking needs thus far, which may be the best way forward for that particular device.

“If you have an Apple Watch, if you’re in that minority group, you are likely to use it to check your basic banking information,” said Karrels. “So for Phase 1 of those devices, we said, let’s do something really basic.”

Thus far, the bank’s mobile app has about 150,000 of its 200,000 active users on the platform since its launch in early July 2017, a bank spokesperson told Bank Innovation.

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