SAN DIEGO — In banking, the days of “if you build it, customers will come” are over.
That was one main sentiment expressed by John Thomas, senior vice president for emerging and electronic payments at Bank of America, during his keynote at the Emerging Payments conference held here this week.
In other words, banks shouldn’t develop products in mobile financial services because “it’s cool,” Thomas said. Rather, banks should deploy mobile services because customers need and want them. To put it another way, banks should first understand their customers’ needs and then develop technology that caters to those needs. Thomas said BofA is ridding itself of a product push, opting instead to listen to its customers to develop its mobile financial services products based on their feedback. Staying cued into customers’ needs is particularly important since they constantly change as technology progresses. “Customers are channel-hopping now,” he said.
Thomas, for one, has noticed that customers’ primary wants from their FIs also now include helping them save money while shopping. “This wasn’t even on the radar 24 months ago,” said Thomas, adding that the discount want also comes from BofA’s affluent customers, too.
“We need to deliver solutions well beyond traditional banking,” Thomas said. “Customers are telling us we want you to go places you haven’t been.”
Still, Thomas reminded banks that they can’t forget about other services, while innovating in new areas.
“Even though checks are going down, it’s still a big business,” said Thomas. “As we look at the future, we can’t forget about the core.”
Plus, mobile payments are still a ways off from ubiquity. Thomas says BofA’s forecast predicts that mobile payments will reach mass adoption in three to five years. When an attendee questioned Thomas about the bank’s NFC stance, he replied: “First, we’ll make multiple bets in the space.” Furthermore, he said banks “need to go beyond the single wallet mentality.”
While navigating the future of payments, he pointed out that the reality of a large institution is that its systems are not that nimble. Perhaps because of this deficiency, he recommended that banks remain open-minded to non-traditional bank partnerships.
“We can’t do it alone any more,” Thomas said. “We have to partner in new ways.”
Making Mobile Financial Services a Legitimate Channel…
In the space of banking and mobile, the perceptions of the customers are changing although the top reason for not using mobile for banking is security. Mobility devices that include phones and high-end devices such as iPads are increasingly enjoying the relationship with the customers as it’s a personal asset which the customer can carry wherever he goes. We can say that due to the ubiquitous nature, most mobile devices tend to be a mirror image of customer’s personality.
Due to these trends and adaption of mobile devices by customers, banks are accelerating their strategies to tap this emerging channel and usage. We have seen launch of mobile banking and slowly being extended to introduce more and more financial services such as payments & commerce, micro-finance, wealth and trading in this channel.
It’s a valid observation about “customers telling banks to go places where they haven’t been”. Be it for banked segment, un-banked segment or under-banked segment or that niche segment who enjoy banking through agents the one device that is accessed and adapted is mobile. Whilst this presents a huge opportunity for the banks to bring their financial service offerings onto mobile, it is critical to have a slice & dice view of each of these segments so as to make the entire financial service offerings personalized to the demands of each of these segments. Knowing which customer prefers to trade on a mobile and which one just wants to use a mobile for paying their bills has a tremendous influence on how financial services are mobile enabled. The strategies to make mobile channel as one of the main stream channel and include in multichannel convergence cannot ignore the dimensions of growth, profitability and adaption of mobile financial services.
As the reliance on analytical capability is increasingly becoming a means for the banks to be “customer aware”, the very means has to be universal across all the delivery channels including mobile. Empowered with the information on usage pattern & purpose, and enabled with device agnostic access & experience, certain measures can determine the success of mobile financial services. These measures could be:
In addition to the above, there could be region specific such as how much banks are able to provide financial services to un-banked and under-banked customer segment, thus contributing towards the country’s economy.
Isn’t it the mark of arrival, where we are noticing high movement of money on mobile is happening, increase in usage and acceptance, expectation to have services beyond traditional banking that mobile financial services takes the avatar of a legitimate channel.