The future is “App” banking!

I'm on travels this week, but have been saving a series of three guest posts to provide you with a different dimension of view for a change.

In the first of these three guest posts Jerry Norton, Head of Banking for Logica/CGI, talks about why m-banking should be a-banking.

The future is “App” banking!

Jerry Norton, Head of Banking – Logica, now part of CGI

Most arguments, articles and opinions about mobile banking miss the point. Not only that, but the term is already in danger of becoming outmoded.  Many of the new devices that we might use for banking are not necessarily mobile – the 32 inch smart TV screwed to my wall being a case in point. It is for this reason that many banks have coined the term “digital channels” and have a role to manage them.

There shouldn’t be a debate about “mobile device” banking at all. We know that number of smart phones and tablets in use in the UK has mushroomed in the last 12 months and that the reliability and speed of the underlying networks are not only unparalleled but are set to improve with the advent of 4G. Coupled with the fact that the phone is an “item of first resort” and “last give up”   - as indicated by last year’s research by the Payments Council, then it’s obvious that mobile devices will become the primary channel for interaction with a bank. 

The real change is that mobile device technology has introduced a new method for customer interaction – a touch screen rather than a keyboard and the “App”. That is the game changer. We should call is “App” banking.  

PC banking started with dedicated applications and slow, dial-up lines. We all heralded the introduction of IP, the browser and the effect it had on the provision of banking services. The standardisation that web technology and browsers gave to electronic banking helped accelerate market take-up.

Given that all smart phones and tablets have browsers then why don’t we use the existing standard PC web based applications to do our banking on mobile devices? We could just use that, right? Wrong!  Will the smart TV use a browser?

What has happened in the switch over to mobile is a transformation in the user experience and interaction due to touch screens and the App. The way we invoke the App and use it has changed the way we interact with services of any type and not more so than in banking.  Web based banking is dead because it doesn’t have a touch screen and it doesn’t have a user interface anywhere near good enough  - not for any other reason. 

The combination of the App with a smaller, anywhere, anytime device is a game changer. The use of the App in a smart TV will allow me to do carry out “home banking” and “e-commerce”. And of course the App can also be “retro” fitted to PCs even those without touch screens.  

So what is App banking?

It is electronic banking initiated and controlled by the customer through an App downloaded from an application store. Why is this special?

The technology behind the development of the App allows banks to customise customer experience and to brand that experience. Whereas browsers only allowed a bank to put a logo on a web page! The browser forced a particular interaction on the customer and differentiation was difficult for the bank.  The browser is dead for banking.

App banking gives the bank an asset, one that can be deployed on a customer’s device. One that can feature all of a bank’s uniqueness, functions and preferences. In a way it is the branch in your pocket. The App also allows a common experience across all devices whether mobile, ATM, PC or TV.

Not only do Apps give benefits to the customer but they offer many benefits to the bank itself.

They are easy to distribute by virtue of the application store concept, which customers are already familiar with. The App can be personalised easily without incurring unnecessary customisation costs. It is more akin to the “market of one” concept that the web promised but didn’t deliver. Most importantly it can offer a much more user friendly experience.

Banks must build Apps now – it’s not an option, it’s expected by the customer. Apps offer a quick win with disillusioned retail customers. These Apps need to exhibit the very best in user design interaction and graphics. This is no longer the preserve of the IT department – it’s a task for marketing, product management and digital channels.

Of course it’s not all roses. The various mobile platforms are not standardised, creating an App for one doesn’t mean you can deploy it on another. The platforms are evolving at breakneck speed. An App developed today is out of date tomorrow.

However, the opportunity to create something that really is a branch in your pocket is too good to miss. Worse still is someone else taking that opportunity away.

Mobile may well be the channel but Apps are the way. 

 

 

 

Comments

[Cormac]

Dont agree with this.
Yes, the App is very important and can/does take a lot of function over from the PC/laptop - but for the time being anyway, the size of the screen and the interface are limiting factors. There are many functions that its great to have "on the go" on my smartphone but there are others for which it is just too small/limited. And the tablet and the laptop have thier own role to play too.
I am always happy then when I see examples of apps where the bank has clearly put some thought into what can best be done (and how it can best be done) on each device.

[KieranJSheedy]

The real issue is the mutiplicity of platforms (mobile or screwed to a wall)... the answer is not Apps, which create a different user experience on every device and are conceptualy designed to work off-line... and are a pain to develop and manain in multiple versions.
The evolution of SaaS web-based soutions via HTLM5 etc will make the device pretty much irrelevent to the user experience.

[neil burton]

As a salaried consumer in a developed economy, being able to access my online bank account from a choice of devices is convenient, but not something I place much value on. I don’t think I’d pay extra for the privilege, and I’d be concerned about the security risk. Most consumers (in the UK at least) are conditioned to expect banking services for free; and they and some politicians seem to think they deserve better.
However, if the effect of the ‘tablet’ is to encourage innovators to produce new complementary tools and services, that starts to get more interesting. For example, an app to reconcile receivables from multiple senders across FP might really help SMEs.
The benefit is I suspect much stronger in developing economies. One of the key learning points from the slow adoption of mobile payments is that clear value and lack of friction enables adoption; without rapid adoption, the scheme will fail to achieve critical mass before investor funds and patience expires. We know there is no ‘one size fits all’; the App (whether on a phone or other device) needs to be written for the specific target market.

I’m doubtful though that banks are best placed to build the Apps. Putting the tools and incentives to do that in the hands of developers who are closest to the customers may be the App’s real power.

[Devin Miller]

Late to commenting but too good of an article to now leave a reply. Not really sure that I agree that the browser is dead. However, totally agree that digital (in a massive variety of forms) is going to be the primary means of engagement for bank customers of all types. It will be interesting to watch how banks transition from a branch based engagement model to a digital engagement model. It will take an entirely new approach to technology.