By Ray Birch
TAMPA, Fla.—Lou Grilli hopes the next thing his iPhone will be able to do is spit out money.
“If I could just down download the ability to get money out of my phone, then I could have the complete banking experience in the palm of my hand,” joked Grilli, director of payments strategy at CSCU.
Grilli emphasized that his point is the iPhone, and the more than two-million apps that have been developed to support the device, have dramatically transformed the way people bank.
The iPhone turned 10 years old in June, and the Apple smartphone and mobile devices that have followed have changed the very concept of how a financial institution—and the services market itself-- is perceived. The iPhone has changed the role of the branch by offloading an ever-growing number of transactions, especially payments, to a mobile device, reducing costs and extending the reach of credit unions beyond any fixed geography. But the iPhone, and the devices that have followed, have also meant new competitors often built specifically for the platform, while legacy competitors with deeper pockets are also as close as a click for CU members. To mark the 10-year anniversary of the iPhone, CUToday.info is running a series of stories on a decade of change launched by the iPhone that’s likely unmatched in the history of financial services.
iPhone Not First
Grilli points out that the iPhone was certainly not the first smartphone, but the first to allow users to effectively work over the Internet with their handheld devices.
“I recall having a Blackberry Pearl before I had an iPhone,” said Grilli. “It had a trackball and a hard keyboard. But no pinch-and-zoom or scroll capabilities. The phone was too restrictive in what you could do on the web to allow me to effectively do any banking. The iPhone came along and changed all that.”
What the iPhone primarily accomplished, emphasized Grilli, is that with its improved Internet capabilities it drove creation of many new banking applications and eventually the concept of websites optimized for mobile devices.
Lou Grilli
“What really made the difference is not that the iPhone itself came out, but the ecosystem that surrounded the iPhone—the mobile apps, the app stores,” said Grilli. “That user interface of the new iPhone is what drove the change.”
The mobile device leveraging sophisticated apps that connected with websites designed to interface with smartphones was a dramatic change from the previous methods available to members to connect remotely with the financial institution, reminded Grilli.
“Before I went to a clunky website from my laptop or I dialed into the old IVR system,” he said. “Now I can download my credit union to my phone, and that, as we know, blew things apart.”
Rush To Mobile
Grilli noted the ability to see financial transactions on the phone drove the initial rush to mobile. Then, when remote deposit capture was introduced, that drove even stronger adoption.
“Now I have really downloaded the branch to my phone since I don’t even have to go to a physical location anymore to deposit a check,” he said. “I think the last time I went to a branch was several years ago when I applied for a mortgage. I recently took out an auto loan from my credit union remotely—from application to closing—and I did not have to print any documents, sign them, and fax them back.”
While big banks have been quicker than CUs to introduce new mobile apps, Grilli said that, overall, the smartphone has helped to level the playing field between banks and credit unions.
“The big banks could have all sorts of really cool in-branch marketing and a branch at every corner, while the credit union was limited in the number of locations,” said Grilli. “But I download the credit union to my phone and suddenly my members don’t care if I don’t have a branch everywhere. The number of branches I have does not make as much of a difference because now my members only need one—the one their hands.”
More stories in this series: