Fintech Mobile & Online

Thinking beyond the ‘horseless carriage’ when exploring smartphone potential

The horseless carriage – used to illustrate how we should think of smartphones as a device for getting to know our customers better.
Written by Roger Peverelli

Understanding what a smartphone means to your customer should be the starting point for real consumer insights, says Roger Peverelli.

The way most financial services firms are exploring mobile makes you think you’ve travelled back to 1995, to the early days of the Internet. The first applications we saw back then on the Internet were typical examples of what Marshall McLuhan called the ‘Horseless carriage syndrome’ – the first car, for example, looked like a carriage without a horse.

When we try to grasp a new medium, we always do so within the confines of a medium we already know. Financial institutions are still in this stage. They’re currently replicating existing regular processes to the mobile channel, enabling customers to conduct their financial transactions, or filling out a claims form. Don’t get us wrong, we think this is good, but we feel that so much more is possible. We really need to think beyond the horseless carriage.

Phones are not phones anymore. Not that long ago, a phone’s purpose was to make calls, but with the arrival of the smartphone, this notion has become outdated. Calling and sending text messages only makes up for 10% of the time a smartphone is used. Research by VODW shows what the other 90% is used for:

  • to wake up
  • to make pictures
  • to boil an egg
  • to check Facebook
  • to keep the kids busy with movies and games …

… all kinds of uses that have nothing to do with the original purpose of a phone. A third of young women check Facebook before brushing their teeth or going to the toilet in the mornings, according to a study of American social media users by Oxygen Media. This research reveals that women aged 18-34 are becoming increasingly addicted (37% have fallen asleep with their phones in their hands, for instance). The smartphone has become an essential part of life – the first thing you look at in the morning and the last thing you check before going to sleep.

Making the most of smartphone ubiquity

Understanding what a smartphone means to your customer and how it relates to your brand, product, or service should be the starting point for real consumer insights. It’s important to look beyond the core product. The context in which the product is used should be taken into account, as well as situations in which it plays a part, since this provides much more inspiration. For a suntan lotion manufacturer, it would be the beach, for insurers it would be situations that put consumers at risk, and for a bank it would be the moment a consumer spends money. This will yield consumer insights and opportunities to help in specific instances in your customers’ lives. Every bank or insurer will do this their own way, but from what we’ve seen so far in mobile services, we think there’s one denominator for success: helping.

For many, the smartphone has become the number one device to aid in all activities by taking care of things faster and easier, and especially to provide insights that are specific for the place and situation they’re in. The consumer should be given insights, information, and opportunities that help him in specific moments or places during his day. A fine example, in its simplicity, is Nivea’s suntan app. Using the smartphone’s GPS functionality, Nivea recognizes which beach you’re on, the weather conditions at that particular spot, and can tell you exactly how to protect yourself from the sun, what factor you require, and when it’s advisable to get out of the sun and into the shade.

American general insurer State Farm realized it had hardly any contact with its customers. Once a year, it sent out a notification that the premium had gone up – not exactly a welcome message. To address this, State Farm developed a simple app that enables customers to view weather and road conditions and forecasts daily on their smartphone. In a simple way, it ensures one daily positive contact instead of a yearly negative one. In Germany, so-called ‘Frauenparkplätze’ have emerged (parking garages specifically for women). A car insurance company is currently developing an app that will guide customers to such safe places.

What all of these applications have in common is customer centricity and customer knowledge focus, rather than product centricity and product expertise. Financial institutions can now always accompany their customers wherever they go in the real world. Mobile phones offer contact points not only through their checking and savings accounts, but through the possibility of offering additional services that really support their everyday lives. Mobile phones give financial service providers the opportunity to be close to their customers and even become part of people’s lives, right where it matters the most.

About the author

Roger Peverelli

Roger Peverelli is a partner at consultancy VODW, specializing in customer-focused strategies in financial services. He is also co-author of 'Reinventing Financial Services. What consumers expect from future banks and insurers'.

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