Most of us now ‘bank’ on our mobile. But when we say that, we really mean that we use our smartphones (or tablets) to check balances and set up transfers and direct debits. That is, of course, a huge benefit to the consumer. But there is far, far more to come. And for the banks themselves mobile represents a high-stakes game they cannot afford to lose.
The Business Imperative
Mobile represents both a threat and an opportunity for any high street bank or financial institution. Banks are of course notoriously ‘sticky’ (meaning the consumer tends to stay with their bank for life), but if there is one thing likely to force a change of brand for the consumer, it is the leap across a technological divide. It's all too easy for one change of habit to lead to another (just ask Tower Records).
So when already moving personal banking to a new platform, there is an incentive for the consumer to identify who does mobile ‘best’ and if necessary make a switch. Factor in the fact that it has never been easier to move banks, and it should be obvious why mobile is a challenge that must be met effectively.
That in turn means thinking clearly about what mobile banking can mean beyond the obvious. And no better summary of that opportunity exists than that from Georg Ludviksson, CEO of Meniga:
“The future of retail banking is a delightful mobile app where actionable insights, as well as high-quality, relevant offers are integrated with everyday banking”
The unspoken conclusion, of course, is that if you are not delivering those delightful mobile apps, somebody else will be. And helping themselves to your customers as a result.
Mobile Apps For Banking
That line above is taken from the excellent “World Of Change”, a report from the BBA that looks at a variety of ways in which technology has changed banking, and will change banking in the future. It is full of current examples, and future possibilities, for mobile banking (and indeed other aspects of banking tech beyond the mobile space).
Combined with our own experience with customers and partners in this space, it makes clear some of the ways in which mobile banking apps will change (make that must change) in order to become a more central part of the customer’s life. Two in particular stand out:
- Financial management. Banks, of course, have a huge amount of information relating to our financial lives. They also have access to aggregated data relating to our peers. From that starting point, we will see mobile apps developed that both track our spend and at the same time enable us to benchmark our financial performance. For the consumer, the ability to ‘get on top’ of finances in an easy-to-understand way is incredibly powerful. They can also automatically deliver notifications when, for example, a particular category of spend reaches a pre-defined limit for the month. Apps that track spend and budget are already popular - imagine how much more compelling they will be when linked automatically to our bank?
- Alerts and advice to the consumer. To some extent the other side of the coin: banks make an ideal conduit for clear suggestions for where the consumer can make savings - again prompted by peer review or, alternatively, via retailers making offers to customers with a particular spend profile. As always, the difference between success and failure with an app of this type boils down to relevance. But a bank has a greater ability to deliver that relevance than almost any other organization.
Of course, both these developments are in addition to banks offering an ever greater range of services on mobile, from loan approval to cashless payment - many of which are already in train. But the future of banking most certainly belongs to those who think big - and consider the ways in which consumers behave outside the banking space. On that note, one last quote, from Richard Fairbank, CEO of Capital One:
“We’re going to need to think more like technology companies and maybe a little less like banks”