Harvard Business School: BofA Mobile Banking Case Study Analysis

This case study analyzes the Bank of America's mobile banking strategy, addressing key issues and proposing strategic options. It begins with an executive summary and introduction, followed by an assessment using PEST, Porter's Five Forces, and SWOT analyses. The analysis examines consumer expectations and competitive dynamics. The study identifies challenges such as organizing mobile initiatives, investment focus, customer onboarding, and integrating mobile banking into the overall customer experience. Strategic options include expanding service distribution, monetizing customer data, and providing real-time product access. Tactical plans for increasing customer perception through social media, advertising, and improved security are also discussed. The paper references relevant literature to support its findings and recommendations, providing a comprehensive overview of BofA's mobile banking landscape and potential strategies for improvement.

BofA Mobile Banking Case

Executive Summary
The current paper is concerned with understanding the current situation of the bank of America
and suggest certain strategies that can help it in the mobile banking strategy. The paper suggested
few strategies such as improving the perception regarding the mobile banking, increasing the
distribution of services through the mobile banking, and others. The tactical plan for increasing
customer perception has been suggested. It has been suggested that the use of social media can
be adopted to reach the customers and improve their level of perception regarding the mobile
security and the services. Moreover, the bank can advertise in radio, television, and magazines
regarding the mobile banking to increase the adoption rate.

Table of Contents
Executive Summary.........................................................................................................................1
Introduction......................................................................................................................................3
Current Assessment.........................................................................................................................3
Key Issues....................................................................................................................................3
PEST Analysis.............................................................................................................................4
Porter’s Five Forces Analysis......................................................................................................4
SWOT Analysis...........................................................................................................................5
Competition.................................................................................................................................6
Consumer Expectation.................................................................................................................6
Strategic Options.............................................................................................................................6
Tactical plans...................................................................................................................................7
References........................................................................................................................................7

Introduction
Bank of America is the big financial company in comparison to the other financial institutions
around the world. The bank current offers multitude of services to its customers and has ensured
to stay at the front of innovations that can help improving the customer experience with the
financial products.
The current paper is concerned with the assessment of the existing situation of the Bank of
America and the problem it is facing in the Digital Marketing division regarding the mobile
banking strategy. The case that is being discussed here was built by Sunil Gupta and Kerry
Herman for the Harvard Business School. In this paper, few strategic options have been
suggested to the company that can be used to handle the problematic situation. One of the
strategic options has been selected and tactical plans have been presented further.
Current Assessment
In order to conduct the assessment of the current situation of the Bank of America regarding the
mobile banking strategy, tools such as PEST Analysis, Porter’s Five Forces analysis, and SWOT
Analysis has been considered. Along with that, consumer expectation has been understood and
the competition has been analyzed. All these have been presented in the subsequent sections
below.
Key Issues
The company has currently launched the mobile banking and has witnessed that good amount of
customers have responded favorably to the launch. However, there are certain issues that have
been identified by the key people within the organization such as Jen McDonald, Douglas Brown
and others. The issues that have been identified are:
- How to appropriately organize to push forward the mobile agenda? This has occurred after few
of the line managers have shown interest in use of the mobile technology to be utilized for other
banking activities.
- What should be the investment focus in the mobile banking aspect? As it is clear from the case
that when more feature is added to the mobile application, it becomes complex and slow which
might impact the consumer experience. Therefore, the issue is that whether the investment
should be on creating different apps for different aspects of the bank.
- How to onboard more customers with the help of mobile banking technology? Whether the
mobile banking succeed or fail depends on the way customers accepts the service. Moreover, the
rate of adoption is directly dependent on the available features, ease of use, and others.
Therefore, the focus is to help the customers gain better experience and also providing minimum
complexity in the features.
- Another issue is decoding how the mobile banking strategy contribute to the overall integrated
customer experience.
These are some of the issues that are being faced by the Bank of America regarding the mobile
banking strategy. The resolution of these issues may ensure that the bank is able to increase the
customer experience and eventually increase the revenue with the decreased cost.

PEST Analysis
PEST analysis is used to analyze the macro aspect of the environment to understand the viable
situation for the conduction of the business. There are four aspects, namely, political, economic,
social, and technological factors that has been considered for the macro environment analysis for
the Bank of America. They are:
Political Factors
The political situation of the country is stable. The country is facing unemployment challenge
and also issues that are associated with the terrorism and some external rogue nations. The
elected political party is showing limited decisiveness in making decisions. Most of the business
activities are being outsourced to the other economies due to the difference in the labor costs. As
per the regulatory environment is concerned, it seems stable to some extent.
Economic Factors
United States is the largest economy on the globe. However, it is facing instances of recession
and decreased rate of recovery which is impacting the financial sector. The slowed economy
reduces the amount of money spent by the consumer. The stock market has also shown signs of
volatility. Moreover, the financial sector has been found to be overly regulated in comparison to
the other business sector. The country is also facing budget deficit. Overall, it can be stated that
the economic situation of the economy is not that much favorable to the financial sector.
Social Factors
The level of education among the customers is at the appreciable level. The people are educated
enough to understand the offers and the processes at the banks. There are certain level of
negative perception among the people regarding the banks, particularly after the recent situation
of the economic turmoil faced due to the sub-prime crisis. The slowed down economy is
impacting the life style of the people and the economy is also witnessing increase in the cultural
diversity (Riquelme & Rios, 2010). The rate of poverty has also increased due to recent financial
crisis and the cost of living has also went up in most part of the economy. This is expected to
impact the tendency of savings among the customers.
Technological Factors
The customers have become comfortable with the technology and they are adopting the new
technologies with ease. As per the revenue, the country is considered among the largest
smartphone markets. The customers using the social media heavily. Though the rate of
innovation has slowed to some extent, but due to the spread of internet connectivity, the
company can easily reach the customers.
Porter’s Five Forces Analysis
This section is concerned with understanding the local environment in which the Bank of
America is operating.
Threat of New Entrant
As per the new entrant threats are concerned, it is not too high or too low in case of the banking
industry. The economy already has many players such as the regional and national banks and
credit unions. The entry into the traditional banking system is a tough nut to crack. However,

other channels are being utilized by new entrants such as the online medium. The example of
Paypal and the Google wallet can be considered here. These might divert some of the revenue
from the traditional banks like Bank of America.
Power of Suppliers
The power of suppliers in this industry can be considered to be quite low. The reason is that the
key supply is the capital which is required to run the bank and a particular bank can raise capital
from multiple sources.
Power of Buyers
The power of buyers in the banking industry can be considered to be low. The reason is that the
switching costs associated with the customers is very high. The reason is that if an individual has
multiple accounts in few banks and has loans to repay and mortgages, then it becomes
challenging to move from one bank to another. Therefore, once a customer is completely acquire
by the Bank of America, then there is greater opportunity to retain the customer for very long
period of time.
Threat of Substitutes
The threat of substitute is very high in this industry. The reason is that the along with the option
of regular savings, the banks provide opportunity to multitude of other banking services such as
insurance, mortgage, and others. One can witness hundreds of non-banking companies operating
at other fronts providing service.
Competitive Rivalry
The level of competition in the banking industry is high. There are more than 6000 banks in the
country and each of them is vying to increase their customer count using various attractive
offers. Even after the high switching costs in this sector, the banks are able to attract the
customers from the competitors through attractive service packages (Mallat et al, 2004).
SWOT Analysis
This section will help understand the strengths, weakness, opportunities, and threats associated
with the Bank of America.
Strengths
The Bank of America has currently huge market share and appreciable brand image in the eye of
the consumers. Therefore, this can help the companies implement the mobile strategy effectively
and impact the greater number of consumer lives. The bank has appreciable capital and is adopts
innovation very quickly.
Weaknesses
The bank is heavily dependent only on one economy (USA). The bank charges high fees in some
of the banking services which can become fodder to scare away the customers.
Opportunity
The bank has the opportunity to expand to the other economies and expand its investment
banking. It can also improve its brand value through the widely used social media channels. It

can use the mobile banking and other technologies to reduce the cost associated with the
customer interaction.
Threats
The varying regulations from the government can pose threat to the bank. Also, the slow
economy weak share price, and volatile decisions from the management can also challenge the
functioning. The other existing banks can also pose threat by adopting the similar strategies as
that of the Bank of America such as mobile banking and others.
Competition
There are many banks that are in competition with the Bank of America and it is more likely that
will also adopt the mobile banking to improve the consumer experience. This is likely to lead to
the switching of customers from the BofA to the other banks. Banks such as Citibank, Wells
Fargo, Capital One and others are some of the strong competitors of Bank of America.
Consumer Expectation
The consumers look for ease of use and security when they use the technology for any financial
activities. Therefore, the improvement in the customer perception regarding the online security
provided by the Bank of America in its mobile banking is more likely to increase the adoption
rate (Barnes & Corbitt, 2003). Once the customers will start using the mobile banking and find it
easy to use, then it further reduces the chances of them switching to the other banks.
Strategic Options
The mobile banking brings with it many benefits to the Bank of America and therefore the bank
should focus on it. As understood from the case, it helps in reducing the processing cost, and
save lots of human capital. The number of ATM’s and branches can be reduced and it will also
help in increasing the customer service and satisfaction. There are certain strategic options that
have been suggested which can be used by the bank to resolve the key issues identified earlier.
They are:
- The bank can use the mobile banking to increase the coverage of the customers and
expand the distribution of its services. The bank will also be able to upsell other services
through the mobile. The bank will be able to strengthen its bond with the customer
through regular interaction with the help of mobile application (Ivatury & Mas, 2008).
- Another strategy is to focus on monetizing the customer data that will be generated
through the usage of mobile banking. This can be further utilized by the bank to increase
the customer service by understanding where the customers need more features and
which features are not needed.
- Another strategy that can be used by the bank is the delivery of real time accessibility of
the products and the services to the customers. This helps the customer feel in control of
their money and it will increase the faith and usability (Kim et al, 2009).
- Another strategy is to focus on marketing campaigns to improve the perception of the
customers regarding the mobile banking. This will help boost their confidence and the
bank will able to push the mobile app usage.

Tactical plans
The above suggested strategic options can be used by the bank to ensure that the mobile banking
strategy can become effective. The strategy which has been selected to build the tactical plan is
to focus on the marketing campaign to increase the customer perception. The reason for the
selection of this strategy over the others is that once the customers will start using the mobile
banking with increased frequency, then it is highly likely that all the rest of the challenges will be
resolved as it will become a key element to retain and improve the customer size.
The tactical plan for the marketing campaign is:
- Create social media plans to promote the mobile banking
- Use emails and sms to increase the adoption rate
- Send advertisements in the radio, television and newspapers to showcase the security of
the mobile banking and the ease of use.
These activities can be used to ensure that the strategy becomes successful.
References
Riquelme, H. E., & Rios, R. E. (2010). The moderating effect of gender in the adoption of
mobile banking. International Journal of bank marketing, 28(5), 328-341.
Mallat, N., Rossi, M., & Tuunainen, V. K. (2004). Mobile banking services. Communications of
the ACM, 47(5), 42-46.
Ivatury, G., & Mas, I. (2008). The early experience with branchless banking.
Kim, G., Shin, B., & Lee, H. G. (2009). Understanding dynamics between initial trust and usage
intentions of mobile banking. Information Systems Journal, 19(3), 283-311.
Barnes, S. J., & Corbitt, B. (2003). Mobile banking: concept and potential. International Journal
of Mobile Communications, 1(3), 273-288.