You have to admit, the Innotribe sessions at Sibos 2010 had the vibe, energy, soundtrack and dialogues of Hollywood blockbusters this year. Good storylines, happy endings and one-liners that would put Sly and Arnie to shame. Anyway, if you haven’t been, here’s a summary.
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Interestingly, the cloud computing keynote and panel sessions at Sibos didn’t approach cloud computing from an IT angle as it is often done but truly from a business perspective.
Why are we interested in cloud computing in banking? Is it because of the economies of capital expenditure that we can achieve through virtualisation? Or is it because of the economies of operational expenditure we can achieve through standardisation and automation? Well, those will definitely help to build the business case for cloud in your organisation. However, the real business benefit of cloud is agility.
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This was a very unexpected statement from one of the speakers at the Mobile Keynote at Sibos 2010.
Next time you do a presentation, try the following with your audience.
Ask how many people have a mobile phone. 100% show of hands.
Ask how many people have a smart phone. 50% to 70%.
Ask how many people have more than one smart phone. 10% to 15% (make a note of their names and don’t invite them next time, they’re geeks).
Ask how many people use their smart phone for mobile browsing, gaming, etc, anything other than making calls. 100%.
Then ask how many people do mobile banking on their phone. 3% to 5%.
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Swift’s message yesterday morning at the Innovation opening keynote was clear. This week all our problems will be solved. They were referring to banking and IT problems of course, otherwise we’d be here a bit longer. Cloud computing, mobile and smart data are the main topics but through The Long Now initiative, topics such as sustainability are also on the agenda. Two speakers in particular attracted my attention.
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TowerGroup, a financial research company, projects that mobile banking users will quintuple in the next four years, going from 10 million active users this year to more than 53 million in 2013.
Have things really changes that much over the last years? Is mobile banking really up and coming? Well, there is some strong evidence supporting the statement.
‘Digital natives’ — young adults, 18- to 25-year-olds who grew up with computers and do everything from their phones are a growing customer segment and one that is eager to take onboard new mobile applications. The strong adoption of social media by this customer segment also opens the door to different ways of advertising one’s services, for example receiving a Tweet promoting a new product or special rate prompts the consumer to click on a link from his phone and subscribe to the new product.
Consumers’ ability to know their account balances anywhere and anytime is a key factor. Especially in light of the financial crisis, customers want to be on top of their finances. Services like Mint.com and Yunoo.com allowing customers to consolidate their banking accounts and access everything through their mobile are already very popular.
Most mobile banking programs perform some of the basics — letting you check your balance, deposits, withdrawals and transfer money to pay regular monthly bills, as well as providing a list of ATMs and bank branch addresses. However, mobile banking will eventually allow users to make payments at the physical point of sale. This fusion of mobile banking and mobile contactless payments “mobile contactless payments” will make up 10% of the contactless market by 2010 according to Celent. If one looks at the number of initiatives in terms of contactless payments, P2P payments – who doesn’t have a Paypal account – there is some evidence supporting these projections too.
More and more consumers now have phones that have mobile Internet access too (in the U.S. this is between 35 and 40 percent of wireless subscribers). Smartphones (those with generally bigger display screens, web access and e-mail), the iPhone, … make mobile banking more and more appealing. It all just becomes more ubiquitous. Like online banking, this form of bank access may soon become commonplace.
How safe and secure is it? According to Javelin Strategy & Research an estimated 50% of mobile users think mobile banking is not secure. Mobile devices are easy to loose, however the convenience often outweighs the risk. It is also about what services you make available to your customers, if you only offer payments to nominated accounts by mobile banking, the worse the criminal can do is to pay your electricity bill. To safeguard against security risks, mobile users should use their device PIN codes, download mobile apps only from their financial institution, switch Bluetooth off when not in use, and avoid lending their phone to strangers to minimize the chance of someone downloading a malicious app onto the device. Educating customers is paramount here.
What next? We saw from the projections and supporting evidence an exponential increase in mobile banking users, who, over the next few years, will be demanding mobile information and newer mobile services from their banks. To maintain a competitive edge, it is important for banks to listen to their customers’ needs and provide vital information on new products and services. And as mobile banking becomes more developed and widely accepted, banks will have to adapt and develop mobile banking products or risk losing a valuable customer base.
Every year in autumn Gartner invites CIO’s and leading players in the IT space to attend its symposium, where they give an outlook on the main trends affecting CIO’s for the coming year. At the latest symposium of November 2-5, 2009, Gartner gave some interesting insights in the way customers will interact with their banks.
According to Gartner, Social media (Twitter, LinkedIn, eBay, blogging, etc…) are rapidly gaining importance, not only in the B2C but also in the B2B space.
Closely linked to this is the trend of “consumerization”. Consumers are better informed and more critical. Peer-to-peer initiatives are gaining in importance. Consumers do believe their peers, more than the companies that sell to them.
The recipe for companies: give your clients a platform where they can connect peer-to-peer, let them be your spokespeople, let them do your marketing.
This is absolutely pertinent to direct banks in today’s economic climate. If one looks at what happened recently at DSB in the Netherlands, one notices that customers today realise that, yes, their bank can go in receivership. This has made customers nervous. Today,customers want 24×7 access to their money. Even a simple glitch that would bring down the website for a few hours could have substantial consequences. Information spreads like wildfire through forums, blogs, … Customers are aware of situations as they arise.
In a traditional bank, customers have alternatives. If they don’t like something or someone they can go and see another relationship manager, they can choose a different channel. In a direct bank, this is not the case, the internet is the channel. The alternative is the competition. There is no second chance. Streamlined and constantly tuned systems and processes are essential to ensure service is delivered 24×7 to the standards customers are now expecting. A good response team and completely open communication are essential to resolve things should such a situation happen.
Fortunately there’s also a large positive aspect to social media. Accessing social network sites and social media tools – for example in the Netherlands one has independer.nl, spaarinformatie.nl to name but a few – enables you to connect directly to your customers and get a clear idea as to what they want, where they are and what makes them tick. And we all know that knowing your customer is a key to success. Once you know them, it becomes much easier to reach out to them and create brand awareness by increasing your visibility.
And after all, if you´re reading this thread, you must be consumerized too, right?