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Vanguard, TIAA-CREF Named Asset Management Leaders in Mobile Finance

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Corporate Insight, a financial services research firm, released a report on Wednesday detailing trends in mobile finance, naming Vanguard and TIAA-CREF as the leaders among asset managers in the mobile space.

Vanguard is one of the few asset management firms to offer mobile capabilities, providing clients with the ability to trade mutual funds, access account information and research investments. Furthermore, Vanguard offers a specialized website for mobile users and an app for use on iPad and iPhone.

TIAA-CREF was also recognized as a leader in the mobile finance space for offering access to client accounts, funds and commentary on mobile devices. It also offers an app that provides educational tools and calculators.

May 2011 was the most active month for mobile technology launches, the report found, with smartphone apps from Ameriprise and Charles Schwab, and iPad-specific apps from Bank of America and Chase. PNC Bank, Charles Schwab and Fidelity also offered mobile check deposit capabilities.

Dan Weigand, Senior Analyst, Corporate Insight“Leading up to our publication, there was a lot of activity [in the mobile technology space], and it will continue in the near future,” Dan Wiegand, (left), senior analyst at Corporate Insight and author of the report, told AdvisorOne.

While almost one-quarter of respondents agreed that it’s too early to tell what impact mobile technology will have on their business, over two-thirds agreed that so far the response has been at least somewhat positive. Seventy percent of respondents said that their firm should “definitely” provide mobile tools, while 80% said it was very important to their customer service strategy to provide such tools.

“The benefits offered by a strong mobile platform are clear,” Wiegand said in a statement. “By embracing mobile, companies can reduce servicing costs, improve client satisfaction and position themselves as industry innovators.”

The widespread adoption of mobile technology among financial services firms isn’t without significant challenges. Customers and managers alike are supportive of mobile efforts, but competing priorities, a plethora of devices to design for and, of course, limited budgets were named as the top challenges.

 “While the logistics of mobile finance pose an array of development, support and security challenges to financial services firms, there’s no denying that we have entered the mobile era,” Wiegand added. “Financial service firms do not want to be left behind.”

“Most firms inside the asset management industry use the same client-facing security steps that they use on their websites,” Wiegand told AdvisorOne. “There’s a tradeoff between security and convenience.” Logging on to a firm’s website on a mobile device is “labor intensive and error prone.” To get around that, some firms will remember a client’s username, but require a password or pin to access an account, but these never the only security feature, Weigand said.

As for what the future holds for mobile technology, now that the market for ubiquitous iPhone apps has calmed down, development of Android apps should “skyrocket.” Over half of respondents are planning to launch an Android app in the next 12 months, compared with 16% of respondents who are planning to add an iPhone app or specialized mobile website.

Only slightly less popular is the tablet market, where over half of developers are planning to launch an Android tablet app in the next year, and 44% of developers will launch an iPad app.

Mobile check deposit may become a standard part of big banks’ mobile banking efforts, the report found.Mitek Systems, which powers mobile check deposit technology for Chase and U.S. Bank, recently added Bank of America and Capital One as clients. The report also pointed to Schwab and Fidelity’s recent adoption of mobile check deposits as evidence that this is more than just a “flash in the pan.”

The report recommends that financial services firms that want to expand the reach of their mobile offerings make them available on all devices. Most of the firms covered in the report focused their initial efforts on the iPhone. Now firms are turning their attention to Android (the number of that offer Android apps increased 50% in the last six months), but only five firms currently offer apps that work on Windows Mobile–Bank of America, optionsXpress, PNC, TD Ameritrade and USAA.

The report also noted that mobile efforts can’t stop at apps; firms need to offer optimized mobile sites as well. Many firms redirect mobile users to a mobile-optimized website, but firms that fail to provide that convenience, the report states, should provide a smart URL. For example, Fifth Third bank features an “easy-to-type” URL,, for mobile users.

Of the mutual fund companies surveyed, all agreed that their mobile offerings would improve in the future, but the report noted that the “highly regulated and conservative” industry hasn’t caught up to banks and credit card companies in terms of embracing mobile capabilities. One reason for this, Wiegand told AdvisorOne, is that they’re “prioritizing advisor resources over client resources.”

That doesn’t mean mutual funds are lagging other firms altogether.

“Mutual funds are behind brokerages in some respects, but do more in others,” Weigand told AdvisorOne. “Mutual fund firms provide more multimedia commentary like webinars. They’re not behind across the board.”


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