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Thursday, 12 July 2012

Digital Banking, part 1 - The Case for Mobile

This is the first part in a series of blog posts I will be writing about Mobile Banking. I've decided to write these posts out of frustration with the status-quo and how banks are approaching the subject.  So really, this is a kind of manifesto for what I would like to see in Mobile Banking.  I hope you find my thoughts interesting!

Part 1 - The case for Mobile

Its time to stop worrying about the business case for Mobile Banking.  We have already entered the 'its a basic requirement of a banking service' era.  It's clear that mobile devices (a category which include tablets) are set to be the dominant form of Internet access in the not too distant future.   Already smartphone sales exceed desktop pc sales.  Just look at how this is beginning to affect web traffic:

Source: StatCounter Global Stats - Mobile vs. Desktop Market Share

If you look at emerging markets, such as India, the trend is even more exaggerated.  Here, Mobile internet traffic already exceeds that originating from PCs.
Source: StatCounter Global Stats - Mobile vs. Desktop Market Share

Here's what an influential Venture Capitalist has to say on Mobile:
"We have seen this in our portfolio too. From board meeting to board meeting, we are seeing a similar pattern. Web is flattish. But mobile is growing like a weed...There is a significant shift going on this year, much more significant than we saw last year, from web to mobile. It is most noticeable in games, social networking, music, and news, but it is happening across the board and it presents both great opportunity and great challenges."
However you cut this data, the trend and the inevitable results are clear - the usage of Mobile devices is growing at an enormous rate.  Mobile will become the dominant access point to the Internet.  Both Microsoft (with Windows 8) and Apple (with MacOS Mountain Lion) bill key features of their upcoming Operating System releases as the cross-over of features from their respective Mobile OSs.  The tail is now wagging the dog, as it were!

If consumers are increasingly voting with their feet, or fingers, and choosing Mobile devices as their preferred access point to the web, it is inevitable that they will choose to do the same with their banking.  Internet Banking is now the granddaddy to the Mobile Banking upstart.  Just as in life, as it is with e-banking.  The young teenager has the world at his/her feet, the grand-father less so.

Why and how is Mobile different to Internet?

So Mobile Banking is inevitable, but does it really differ from Internet Banking?  Of course it does, and profoundly so!  Just look at the different profiles of how the devices are used:
  • Internet Banking is tied to a desk at home or in the office.  To use it is a deliberate and planned decision, probably at lunchtime or in the evening.  The PC itself is little more than a dumb terminal - the only way of capturing data is through the user typing on a keyboard.  Internet Banking capabilities are constrained by the location of the device, the sporadic usage patters and the restrictive data capture capabilities.
  • By contrast, Mobile devices are in the consumer's pocket all of the time.  They can be used in a much more spontaneous way.  They are with the consumer when they make purchases and are increasingly used in a commerce context - whether that is to make a mobile payment, to lookup product details, or to make a price comparison.  The device itself includes a rich array of sensors that can be used to gather contextual data - GPS for geo-location, a camera for image capture, a microphone for speech recognition. 
The nature of Mobile devices, the way they are used and the context in which they are used are very different to those of a PC.  These facts have a profound impact on Mobile Banking and how it will differ dramatically from Internet Banking.  This difference is much more than how to cram a website onto a smaller screen.  This is not about re-purposing Internet Banking, its about entirely new ways of transacting business by exploiting these capabilities, for example:
  • The ability to automatically collect and send novel types of data, including geo-location, barcode recognition/generation, etc
  • The ability to play a roll in payment transactions
  • The ability of businesses to push data and messages to Mobile devices without any initiation by the user
  • Novel ways of authenticating users, for example by voice or face recognition


The business potential of Mobile requires a totally different perspective on what a Banking experience should be.  Most (all?) banks have started this journey by replicating the traditional Internet Banking experience, presenting a scrolling list of printed transactions.  This was itself closely modelled on the paper model that went before, that of a printed list of transactions.  But this is 2012 - there are so many richer and more descriptive ways that data can be represented.  Why are we constrained to the model pioneered by the printer?

This is the wrong place to start.  We need more imagination than this.  However, imagination does not come from asking users/customers what they want, which is often how large corporates go about things.  Customers won't know, so don't bother asking them.   Henry Ford was reported to have said "If I'd asked people what they wanted, they would have said a faster horse".  Steve Jobs famously said "A lot of times, people don’t know what they want until you show it to them".

Mary Meeker's "Internet Trends 2012" report provides a nice overview of how so many industries are being completely re-imagined by the impact of Mobile.  Such re-imagining can only come about by clever people doing some deep thinking.  The same needs to happen with banking.

A Starting Point

The only way to re-imagine a consumer-facing product is to be 100% focussed on what could make the consumer's life better, not what is convenient for your organisation.  It sounds daft, but I continually see large corporates focussed on what is convenient for them, not what is best for the users.  Often large-company culture has become so ingrained that I genuinely don't think they realise this is what they are doing - but it is.  The minute you start to think about engineering first, and not "delighting and surprising the user", you have lost the opportunity for brilliance and enter into the reals of mediocrity - and that's why we have Mobile Banking Apps that are little more than a hack on traditional Internet Banking and attempt to replicate the pieces of paper we used 20 years ago.

Steve Jobs is much better at explaining this than I am.  Take a look at this video to understand his perspectives on why focussing on the user experience first is the only way to do things (the quality isn't great, but watch this professional respond to to tricky question and then get onto his own agenda).  Mobile really does require a re-imaginging of banking and I think the way that Apple have re-imagined Mobile is a good starting point for the approach that banks need to take.

But doing this re-imaginging is not easy - if it was, it would already have taken place.  Maybe we need a brain-reboot in order to think differently about these subjects.  I really like Simon Sinek's approach to this.  Watch his video and see if that helps you to think differently.

Sinek suggests we need the 'belief' statement first - a statement that answers the questions "What's your purpose?", "Why does your organisation exist", "Why do you get out of bed in the morning?", and most of all "Why should anyone care?".  I think that's a really good place to start and requires some deep thinking.  You need to watch the video to really understand what I'm saying - press play and come back when it's finished - I'll still be here!

What's next?

This article is the first in a series and was intended to be an introduction to the significance of Mobile for banks - an appetiser, if you will.  Future articles in this series will explore in detail what the possibilities might be and look in more detail at subjects such as:
  1. Radically different Mobile User Interface choices
  2. Exploiting Mobile sensors to better connect banks with the outside world
  3. Different ways of integrating banking with the Social Web
  4. Mobile Payments choices and why nobody has yet cracked it
  5. Exploiting Transaction Analytics through Mobile
  6. Advanced technologies - Artificial Intelligence and Speech Recognition for banking?
  7. Is security really such a barrier?
  8. An approach to Innovation to make this happen
Thank you for reading thus far - hopefully you will continue the journey with me in future posts!

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