It will come as no surprise to some that the future belongs to the mobile generation. What’s surprising is how fast mobile technology has advanced. It seems like yesterday when Steve Jobs held aloft the first-gen iPhone (in 2007), and mobile technology has grown exponentially ever since.
Various business sectors have benefited from this technological growth, such as gaming, retail, and telecoms. Others have struggled to adapt to the changing face of consumer demand, such as financial services. Traditional banking as we know it is changing, and mobile technology, coupled with advances in user experience expertise, has created demand for services that are simple to use and have our best interests at heart. We could perhaps be entering the era of a financial ‘new normal’.
Young startup companies have spent the last few years chewing at the leathery carcass of incumbent banks, stealing a march on things such as insurance, investments, wealth management, loans/lending, and money transfers. Yet, it isn’t all doom and gloom for the banks, as illustrated by new survey results from Efma and Backbase.1
For instance, the report reveals that mobile devices (including tablets) currently see the highest increases in revenue (31%) for respondents (more than 100 C-level bankers). Furthermore, they expect this to increase to 50% by 2020. Traditional banks clearly take mobile technology seriously, especially where it concerns the bottom line. Physical channels such as bank branches and ATMs still play a large part during many banks’ transition from the dark ages to the 21st century, but you can’t knock their willingness to get the ball rolling.
I’m in the ‘lend them a hand’ camp in regards to what should happen to banks. I think they will still be around in 20 years’ time, though they will look very different. I believe that collaboration with ‘challengers’ and startups is the key to bearing the brunt of transition, and this should benefit both parties, as old bankers still have gravitas and knowledge to counter youthful exuberance, and they understand regulatory hurdles like Mary Berry knows flour.
What still needs to happen is for banks to understand what customers are using their mobiles for. They’re not simply marketing devices for pushing them to visit other channels (although this does work). The Efma/Backbase report suggests that there is work to be done in improving the user experience, so that customers come first. Business teams such as IT and marketing should work together more closely, and not be hampered by a strategy based on having silos of information and responsibilities. For instance, the survey reveals that only 30% of respondents’ social and marketing channel is accessible to marketing without the help of the IT department. This creates blindspots in understanding valuable customer data.
The good news is that grizzly bears and wolves can coexist in a financial ecosystem that embraces technology to make the end-user experience better. Those who adapt to the changing fintech landscape will fair better than those who ignore its potential.
1. Download ‘Omni-channel banking: The digital transformation roadmap‘