Bank of America Case

Problem Statement

BofA launched mobile banking in May2007, to allow customer to access the bank through mobile application and through mobile web on their phone browser. In less than three years BofA had around 4 million mobile banking customers at an adoption rates five to eight times that of the online banking. Because of this success, the line-of-business managers like mortgages and credit cards were asking for more upgrades to leverage the mobile platform.

This request created a dilemma for the BofA management as adding more feature to the existing app will make the bank’s mobile app more complex. This complexity could slow down the performance of the app and negatively affect user experience. The management also noted that this kind complexity has led to some high-profile failures in the marketplace. Also, it was unclear if the users were ready to sign up and use these added features like mortgage service or credit card on their mobile phones. The other option the management was considering is, create multiple apps to target different target groups. But to follow this option the management has to reprioritize critical bank technical resources from other important business areas, such as online and ATM. These were the factors that the management needs to take into consideration while coming up with a solution.

Strategic Situation Facing Management

The U.S financial industry was fragmented, with thousands of banks offering retail and wholesale banking services. BofA is the largest U.S bank holding company, followed by JP Morgan Chase, Citigroup, and Wells Fargo. The recession in the U.S in 2009-2009 resulted in consumers and businesses reducing their spending, this was difficult times for BofA because of the size of its retail business. But this also provided opportunities for other small firms. Some banks had begun waiving ATM fees, and offered greater access to banking associates. However, the research showed that consumers still chose their bank...