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.