Wealth Managers' Mobile Disadvantage
The adoption of the third-generation mobile standard, known as 3G, triggered a technology revolution. The most significant date in the history of mobile may be July 11, 2008, when then-Apple CEO Steve Jobs introduced the iPhone 3G alongside a proprietary application distribution platform called the App Store.
Mobile FirstWall Street & Technology's March 2013 digital issue takes an in-depth look at how mobile apps have become so pervasive that many financial services firms are developing their applications with mobility in mind first. To read more, download our March 2013 digital issue now.
The rest is history. Apple went on to sell 1 million iPhone 3Gs on the launch weekend alone, and the App Store has proved to be a rousing success. While there were only several hundred applications available to download at launch, an active community of mostly small software development firms has added more than 800,000 applications since, ranging from news readers to restaurant guides, subway maps, computer games and much more. In fact, the enormous library of applications in the App Store has created a self-sustaining ecosystem: More customers want to use the iPhone because of the apps, while the rapid adoption of the device has made iOS an attractive outlet for software developers.
This success has attracted other firms. Google has developed the Android operating system for smartphones, with a similar proprietary application distribution platform. Unlike Apple, whose App Store offerings are available only for Apple's mobile devices, Android apps are available for several mobile devices, including ones from Samsung and HTC. Apple conceived yet another master stroke in 2010 by breathing life into a dormant mobile computing category: tablets. The Apple iPad, launched on April 3, 2010, is in essence an iPhone with a 9.7-inch display. The device was an instant success, with only the available capacity for production limiting iPad sales. By July 2011, Apple had sold 30 million iPads, and Apple's App Store contained more than 100,000 applications designed for the device.
Consumers have been at the center of the mobile revolution. Positioned as personal gadgets, smartphones and tablets have found rapid adoption across the general population. It is therefore no surprise that direct-to-consumer businesses have been among the early movers taking advantage of these new communication devices. Travel-booking websites such as Kayak and restaurant reservation sites like OpenTable were quick to deploy apps for iPhone and iPad devices.
Retail banks -- first the large national banks, quickly followed by regional banks and credit unions -- also jumped to extend their online banking sites to smartphone and tablets.
Within the wealth management industry, online brokerage firms have been the early movers, taking advantage of broad consumer adoption of smartphones and tablets. The leading online brokerage firms -- Fidelity Investments, Charles Schwab, TD Ameritrade and E-Trade -- were the first to develop applications that let individual investors access their brokerage and banking accounts through mobile devices. The technology has moved these direct-to-consumer businesses closer to their customers and increased service levels. Customers can now connect with their brokerage firms at any time and from anywhere.
The increase in connectivity to their brokers via mobile devices came at the perfect time. Just as the adoption of mobile devices began to boom, the financial crisis exploded. Because of the large losses that many investors suffered during the crisis, consumers now demand a greater level of transparency from their financial services firms -- something mobile communication devices are in a perfect position to deliver.
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