By Serge van Dam, VP Mobile Solutions, Fiserv
Mobile services continue to flourish around the globe, due to the rise of affordable technologies in developing and emerging economies, as well as the success of smartphones and tablets in developed economies. Mobile technology is enabling the delivery of high-quality services to businesses and consumers in unprecedented ways and in unprecedented numbers.
The number of consumers using mobile banking has increased significantly in recent years. In just a year, from 2010 to 2011, mobile banking use more than doubled in the U.K., Sweden and the U.S. Additionally, rapid adoption of new users to the mobile channel has continued’.
Continually advancing technology, ubiquitous access and exponential adoption have combined to make the mobile channel incredibly powerful and far reaching – and therefore a channel with great potential to transform the financial services industry.
The Digital Revolution
While mobile banking is on the rise, consumers are by no means abandoning other digital banking channels. In fact, consumers increasingly desire the ability to seamlessly manage their finances across channels, using their laptops, tablets, and smartphones. In recognition of this, forward-thinking financial institutions are ensuring that the infrastructure is in place to support round-the-clock access to consistent and easy-to-use experiences across digital channels.
The benefits of the digital revolution, for both consumers and business customers, are convenience and speed. Banks can capitalize on the digital revolution to differentiate themselves by providing a superior user experience. This will help banks retain customers more effectively and grow the number of opportunities to deepen customer relationships through additional product usage.
Two significant shifts
With the mobile channel continuing to grow; there are two shifts profoundly impacting the way banks deliver services across channels.
First, there is a demand for “information convergence” across channels. Consumers expect information about transactions completed via one channel to be readily accessible via another, and expect to be able to initiate a transaction in one channel and complete it in another.
Second, there is a significant degree of “interaction specialisation” taking place within each channel. This interaction specialisation is driven by the unique properties and attributes of each channel. This specialisation influences the primary and preferred activities conducted by consumers through the various channels.
Channel Preferences Emerging
Consumers are establishing different habits and preferences about which channels they use to accomplish different financial tasks. For day-to-day needs, consumers generally prefer self-service via digital channels — mobile and online – respectively the fastest growing channels.
This kind of interaction via the mobile channel can be thought of as “snacking”. From a financial services perspective, snacking encompasses frequent interactions that take less than 60 seconds. This includes tasks such as checking balances, receiving alerts and paying bills. One financial institution reports an average of 26 logins to mobile banking per user, per month – proof that customers desire to consume financial services information in quick, frequent servings via the mobile channel.
The snacking analogy can be extended to the online channel and to the branch as well. The online channel serves up the financial equivalent of lunch – a square meal. Consumers go online when more browsing and a slightly deeper level of engagement is required. This involves tasks such as comparing products, managing budgets and setting up preferences. These types of activities usually occur on a weekly or monthly basis.
The branch is for fine dining, those special occasions where more personal service and in-depth interaction is required. This includes advisory services and overall relationship management, encompassing critical decisions that require consultation and typically occur infrequently.
Integration and Customisation
The shifts toward information convergence and interaction specialization need to be addressed by financial institutions. Delivering consistent information across channels will require back-end integration and real-time functionalities that are often not in place today. This will be further compounded by device proliferation, the rapid rise of tablets and the blurring of lines between social media as an interaction and transaction platform.
In addition, interaction specialisation will require that financial institutions tailor services for specific channels. This will impact services delivered via the mobile device, as financial institutions will be expected to support “mobile-only” services such as remote deposit capture for checks, location-based offers and contactless payments via near-field communications (NFC) and other technologies.
Beyond self-service, the mobile device is also likely to become a banking platform for different types of interactions, such as those conducted via a mobile wallet. In this context, financial institutions are under pressure from nontraditional players – such as mobile operators and consumer brands like PayPal™ – that would like to gain access to both customer information and transaction revenue.
To maximize the return from mobile banking investment takes getting information convergence and interaction specialization right. Across the industry, opportunities remain to unify the user experience across channels and deliver better, tailored services via the mobile channel. By leveraging these opportunities, banks will establish stronger relationships with customers and capture greater market share. The winning approach will be to have an integrated channel strategy that also addresses the unique attributes of the mobile channel.
UBX appoints new Chief Investment Officer
In line with its strategy to explore and invest in companies and platforms of the future, UBX—the Fintech and Corporate Venture Capital arm of Union Bank of the Philippines (UnionBank) — is announcing the appointment of Matthew Kolling as the company’s Chief Investment Officer (CIO).
As CIO, Kolling will be managing UBX’s Corporate Venture Capital (CVC) fund. He will also play a key role in raising capital for UBX while assisting the company in key corporate transactions, including the structuring of joint ventures and acquisitions.
Prior to his appointment at UBX, Kolling has been Head of Venture Investments at Aboitiz & Company since 2019, wherein he had been working with UBX on investment portfolio decisions. Before that, he held senior positions in Private Equity, Venture Capital, and Investment Banking at firms such as Providence Equity Partners and Morgan Stanley in New York.
Kolling has more than 20 years of experience in managing investments and deals in the Technology and Telecommunications industries and is active in Venture Capital and startup communities in the Philippines and the Southeast Asian region. He currently chairs the Manila Angel Investors Network, among others.
“We at UBX are excited to welcome Matt as our new CIO. We firmly believe that Matt will be instrumental in driving value creation opportunities, both within the CVC fund and our corporate ventures. We look forward to working with him as we fulfill UBX’s vision of a future where banking services are embedded into everyday experiences that matter,” said UBX president and CEO John Januszczak.
Meanwhile, UnionBank president and CEO Edwin Bautista said, “The addition of world-class talents in our pool reinforces our strategy to future-proof the organization and our business as we prepare for many new opportunities that come with the changing times.”
It’s all relative: Older generations feel helping out the family financially is more important since the Covid-19 outbreak
Before Covid, 23% of people prioritised helping younger generations out financially, that increased to a third as a result of the pandemic
A recent survey* conducted by Hodge has revealed that the Covid pandemic has led to more people wanting to help younger family members financially.
A third (31%)** of those questioned said that since the Covid outbreak giving a financial gift to children or grandchildren is more important to them, compared to 23% who said it was a priority before the pandemic.
The traditional “Bank of Mum and Dad” is still very much open for financial help, with parents being responsible for 72% of the gifts, but the study also revealed that financial gifts can come from all corners of the family – including children (14%) and siblings (14%).
The survey also found that a third of people have received a financial gift from family, with those aged between 25-34 as the most likely to receive
The most popular reason for gifting money to family is for special occasions such as a quarter of gifts were given for weddings and birthdays but 11% of people have received money to help with big purchases such as cars and houses. In addition, 19% of people have received help with day to day finances, with around 14% of those receiving a gift have done so to pay off debt.
Emma Graham, Business Development Director at Hodge, said of the research: “Our study showed that, as a nation, we all want to help our family out when it comes to money. And whilst we all think of the Bank of Mum and Dad or Gran and Grandad as a traditional source, we were surprised to see that 14% of brothers and sisters are also helping out.”
The findings come from a recent intergenerational study conducted by Hodge, who interviewed over 3000 people about their attitudes towards finances and their aspirations for the future. The full research findings can be found at https://hodgebank.co.uk/2020/05/19/money-its-all-relative/.
As part of the study, people were also asked about paying back the gift, with 40% of beneficiaries expecting to pay their parents back, but this dropped to 28% if the gift came from grandparents.
From the gift donor’s perspective, 26% expect the gift to be paid back, however just 15% of grandparents expected the money back.
Hodge has produced a set of guides on how families can navigate the tricky subject of giving financial gifts within a family, as well as the considerations and steps that be families should think about taking before a gift is given, such as is it a loan or a gift and thinking about contingencies if the family member’s circumstances change. The guides can be found here: https://hodgebank.co.uk/news/
Emma continued: “It’s clear that families feel strongly about offering financial support to each other if they are able and this has increased since the Covid pandemic. Before Covid, 23% of people prioritised helping their families out financially in the next five years. Since the Covid-19 outbreak that has increased to a third of people saying helping a family member financially had become more important.
“So, it is clear that the Covid-19 lockdown and subsequent predicted economic downturn, has led to more families looking to share wealth to help younger children or grandchildren during this difficult time. Many people may look to Later Life mortgages, where many products have reduced their rates and have flexible lending criteria, to help out a loved during these difficult times.”
New report identifies the factors which will determine SMEs’ chances of a successful COVID recovery
· Analysis of the performance of over 1,000 UK small and medium-sized businesses by Allica Bank provides roadmap for SMEs
· Regular training, an openness to innovation, and a clear vision all contribute heavily to an SMEs’ chances of success
· Allica Bank has launched a programme of free workshops to expand on the findings and support business owners
Business bank, Allica Bank has combined data and insight from over 1,000 UK SMEs with a multiple regression analysis to determine what factors most closely aligned with an SMEs’ chances of success and separated the highest-performing businesses from their peers. These ‘rules for success’ have been compiled from the research data to support British businesses as they look to chart a course to post-Covid recovery.
The full report identifies six behaviours for small and medium businesses to follow, to maximise their chances of a successful COVID recovery. The six top-line rules emphasised by the data were:
Rule 1: SMEs should regularly train staff
Of the top-performing businesses analysed, 47% provided training for employees at least on a quarterly basis, compared to just 32% of other businesses. Regular employee training was linked closely to success by the model.
Despite this, many small businesses have neglected training and nearly half (46%) of the small businesses analysed only provide training for employees about once a year or less often. This included 15% that never provide employer-funded training. This discrepancy could represent a significant opportunity for small businesses to unlock the potential of their employees and thrive in the post-Covid economy.
Rule 2: SMEs need to focus on innovation and technology
Looking again to the best performing businesses, 76% were found to either continually (39%) or often (37%) be considering new opportunities for technology in their business. This is compared to only 51% for businesses considered to be outside of the top ranks, out of which only 27% admitted to continually looking for new technology opportunities.
Rule 3: Small business must have a formal, long-term vision
Nearly two thirds (66%) of the most successful businesses in the survey had a formal, long-term vision, compared to just 50% of businesses outside the top 100. Looking to the businesses that scored the lowest on the SME Performance index, only 37% claimed to have a formal, long-term vision.
Rule 4: SMEs should broaden their customer reach and find new markets
Of the top-performing businesses, 65% of these have overseas customers compared to just 40% of the worst performing businesses. Among the best performing SMEs, over a third (34%) identified international expansion as one of the top three drivers for their success.
Rule 5: SMEs need to develop reinvestment plans
22% of the best performing SMEs reinvested some of their profits into the business in the past three years with an average 9% of profits being redeployed. Tellingly, this is nearly double what other businesses admit to reinvesting in their business (5%).
Rule 6: SMEs should engage with local business organisations and networks
Of the top 100 SMEs, 30% had obtained external credit to expand over the past three years (compared to 24% of other businesses). Meanwhile, only 16% of all other SMEs had engaged with local enterprise partnerships or growth hubs in the past three years (compared to 23% of the top 100 SMEs).
Chris Weller, Chief Commercial Officer, Allica Bank, said:
“All small businesses are different, as are all small business owners, but one trait they share is an innovative resilience. Whilst the coming months and years will undoubtedly continue to present extreme challenges, there is no doubt that small and medium sized businesses across the UK will rise to meet them head on.
“To give them the best chance to succeed, though, they need to be equipped with the right tools. There is certainly no silver bullet or panacea for every small business, but as this study has found, there are a number of common factors found in the most successful businesses that allow small enterprises to thrive and that they can consider individually for their business.
“This research has identified common ‘rules for success’ that speak to every aspect of running a business, not just the financials. Once we saw these results, we wanted to use them to help small businesses begin to re-build and prosper, by outlining common factors and then examining how best they can be practically applied to businesses in all sectors of the economy.
“Small business owners and their employees have been hit hard by the crisis, but they have the drive and resourcefulness to breathe new life into the economy and bring energy to post-Covid Britain. Our commitment at Allica Bank is to give them the support they need to do so, every step of the way.”
The full report contains a wealth of additional data and insight into each of these topics. As part of its mission to empower small businesses, Allica Bank is making the findings freely available and running a series of free online workshops with relevant partner organisations for businesses to attend.
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