Mobile Technology in Banking and Finance
Around 40% of people worldwide now use mobile technology in banking and finance, most often in the form of specialist apps, on a weekly basis (or more) to monitor their accounts, transfer funds and pay their bills.
App-based banking is one of the fastest growing channels in the financial services sector, which is unsurprising when taking into consideration that applications are the top area of investment in mobility for organisations globally.
However, many banks are still yet to leverage the full potential of mobile technologies, and must soon begin to think beyond the traditional transaction-based restrictions of their business models, in order to grow and improve ahead of their competitors.
The most forward-thinking and innovative banks are redefining their fundamental processes in anticipation of the proliferation of digital channels such as mobility, to boost efficiency of customer acquisition, servicing, upselling and relationship building.
Two of the most prominent challenges for financial institutions such as banks are being primarily transaction-led, instead of customer-centric, as well as functioning in silos without an integrated set of offerings.
These two attributes inhibit banks from fully engaging their customers, making it difficult to personalise and streamline the mobile user experience that has become expected of businesses in all industries in recent years.
While mobile technology in banking and finance has been well received by the retail side of the industry, private banking organisations have faced more complex issues with their services.
As clients that are involved in private banking receive a more personalized, individual service for their financial assets and investments, specific apps are now being created in this area to allow the organisations to manage accounts, provide market updates, communicate more directly and enforce higher levels of security.
Online banking, followed by mobile banking, were the first waves of digital disruption, as customers realised the availability of more convenient ways of managing their finances than the traditional branches. The capabilities have developed over time from being fairly basic to highly intuitive and un-restricted by location. We have now even seen the first bank, based in Indonesia, which allows users to transfer funds via Facebook as long as they are connected as 'friends'.
A significant trend taking shape and shifting banking further towards a mobile ecosystem is the introduction of mobile wallets and payments. The market for this advanced technology has thus far been dominated by organisations such as Google and PayPal rather than financial institutions, but this could change in the coming years.
Despite the release of Apple Pay in October, there is still a degree of unease among consumers surrounding these solutions due to a third-party having access to bank details and records of purchases they make.
If banks can develop mobile wallets and enable mobile payments with a user experience to rival that of technology giants such as Apple and Google, their superior security and existing insight into customers' personal details would be an enormous advantage in terms of adoption.
Leveraging the analytical proficiencies of the cloud will also propel the services banks can offer their customers into a predictive, responsive, real-time mobile experience. The nature of customers' relationships with their banks means that there are colossal amounts of data available to be translated into contextually-aware, personalised solutions based on patterns in behaviour and decision-making.
Consequently, customer relationships, loyalty, satisfaction and retention will all improve for the banks that are able to implement these improvements.
Similarly to the trends that are affecting the wider mobility space, financial enterprises are beginning to offer wearable devices to their users to augment their processes even further. Barclays, for example, have developed a smart wristband that can be used by customers to pay for everyday items in a quick, efficient fashion, without the need for cash or cards. This wearable revolution that many experts forecast could soon be a common method of managing finances and navigating daily life across the globe.
It seems that the number of physical bank branches in operation is set to decrease significantly as more mobile technologies are taken advantage of within the financial services sector, directly correlating with a more infrequent use of cash, credit and debit cards in favour of mobile apps and wallets. As these adjustments to banking become mainstream, financial enterprises are set to save costs and collect substantial ROI from the transformation.