Bank Of America Case Study

1476 Words6 Pages
Bank of America: Redefining Customers

Introduction

How can Bank of America (BofA) gain value by positioning itself in the fast changing and growing industry of mobile banking? It is certain that the increased usage of mobile applications and smart phone users may rapidly shift the way consumers bank. Bank of America is considering how they can fulfill customers’ needs and desire for better quality mobile banking as technology develops. As increasing numbers of technology-savvy users want more functionality of applications, there are managerial issues arising from building new applications or to add complexity to current applications. They face problems whether to have different applications for different target groups or to just add complexity
…show more content…
Whenever new technology or service comes out, the psychological switching costs are high among the existing customers. They tend to stay with their own services without thinking of net benefit of new services or goods. However, because of this psychological switching cost and their tendencies, an opportunity could emerge for BofA as a first mover in mobile banking to capture and extend new customers segmentation.

To capture its opportunities, BofA must understand the biases consumers bring to their decision-making. The main concern regarding “security” of mobile banking actually stops and prevents many consumers to not use the system. It is important that 71% of pre or existing mobile banking users rate security features as “highly important” in choosing or switching banks (Exhibit 4). Enhancement of the security feature in mobile banking will enlarge the opportunity to improve both their underlying authentication technology and the user
…show more content…
Customers will easily try and adapt to new technology. Like online banking, or even more than it, once customers have entered all of his or her banking information and bill payments, they will be less reluctant to change their banking service as switching costs increase.

Moreover, BofA can try to contract with major wireless service companies such as AT&T and Verizon to pre-install this application to increase its awareness to customers through easily accessible way. Otherwise, BofA can try to contract certain cheaper payment options on unlimited data-access or usages with this application. As customer’s behavior tends to stay with it’s ‘standard’ from initial service and its experience, having strong distribution channels through wireless company may be costly for BofA, but it will secure its market rapidly and safely.

Overall, the key for BofA to sustain its largest market share is differentiation through marketing mix (4Ps). Even though differentiating an item may charge BofA to increase cost, the willingness of the customer’s payment towards the usage of application will increase as well. This differentiation will engage brand loyalty and potentially increase entry of barriers to competitors. Moreover, after BofA secure the market, the next step would be seeking for more opportunities that are arising in the mobile payment market and table

More about Bank Of America Case Study

Open Document