It’s interesting talking with banks about mobile, and after hosting a meeting about the impact of mobile payments and banking on European banks this week, there is a homogeneity to the dialogue.
The core is that everyone believes mobile banking and payments is taking over as the core essence of reach with the digitally native customer but, and it’s a BIG BUT, how do you convince the customer to move to mobile banking as their primary bank.
This was raised by a company that is primarily mobile first. They have an internet banking site but no branches, and they are very focused upon gaining trust through mobile channels.
The issue they face is that most customers are using the bank as their secondary bank. Their salary mandate, direct debits, credit transfers and primary bank activities that make money are in their core traditional bank, whilst their fun and frivolous daily life is managed through revolving balances in their mobile account.
I guess this conversation is indicative of the gradual change that is taking place with some of us believing the change is happening far faster than in reality (take note Brett King and Chris Skinner, ha!).
Sure, digital natives and Gen Y believe in technology, but it’s interesting that their trust still lies with banks that have bank licences and often bank branches.
Because they’ve been raised this way?
Sure, in part, but more fundamentally because banks with licences are guaranteed to pay out if they go bankrupt. They are regulated and have consumer protection of deposits. Banks without licences, of which there are many and more growing every day, give no such guarantees.
Equally, banks with licences and branches give you somewhere to go to beat someone up if you want your money back. More importantly however, they still provide a fundamental human connection to money that does not exist with a 100 percent remote bank offer.
Now, I can already hear the kickback from the digital fundamentalists who decry such beliefs and yes, isn’t it proven by the plea of the mobile-only bank that they cannot get customers to completely trust their offer as a primary bank service proving that this is still the case (even with the Gen Y).
So let’s wait for the iGen before we write off traditional bank models and structures.