Brett King

Archive for the ‘Mobile Banking’ Category

Mobile Payments have been Mainstream for a while now…

In Mobile Banking, Mobile Payments, Technology Innovation on May 18, 2012 at 01:31

If you believe the pundits, mobile payments are years away from being mainstream. But that’s not at all an accurate assessment of the state of the industry.

Firstly, a mobile payment can be many things. There are seven primary models for mobile-enabled payments:

  1. SMS based transactional payments
  2. In-App Payments
  3. Direct Mobile Billing
  4. Mobile commerce and/or web payments
  5. Peer-to-Peer payments
  6. Virtual currency payments
  7. Contactless payments

As of today, it appears that around half of the developed world has made a mobile payment of some sort in the last 12 months according to this criteria – at a minimum an in-App purchase made from a mobile or iPad would qualify. Put that in perspective, more people made a mobile payment in 2011 than wrote a cheque in developed economies like the US, UK and Australia!

Would you call cheques mainstream? Of course. So how can we not call mobile payments mainstream already?

A recent study from ACI Worldwide and Aite Group – where smartphone usage in 14 countries was put under a microscope – identified a group of consumers where mobile payments behavior is definitely the norm. This group was classified as “Smartphonatics”.

According to this research, 80 percent of Smartphonatics have used their smartphones for mobile banking, just one-third of non-Smartphonatics report doing so. 70 percent of Smartphonatics have used their smartphones for mobile payments; under 25 percent of non-Smartphonatics have. Smartphonatics are generally younger consumers also: 36 percent of Gen Yers (between the ages of 20 and 31) are Smartphonatics as are nearly one-third of Gen Xers (ages 32-46). The number drops significantly among both Baby Boomers (ages 47-65) at 18 percent and Seniors (66+) at six percent

“Smartphonatics enthusiastically use their smartphones when they shop for products and services as well as when they interact with their banks. It is quite clear they are an emerging consumer force. Smartphonatics are driving the adoption of mobile banking and payments and will be an agent for change. Financial and retail institutions will need to adapt or risk being left behind.”
Ron Shevlin, Senior Analyst, Aite Group

The ACI/Aite research indicated that globally around 1 in 4 consumers (25 percent) count as Smartphonatics, with higher numbers found in India and China than in the United States and Europe. This makes sense, because in markets like India and China, mobile payments are competiting head to head in the growth of payments alternatives like cards, which are still quite new for most of the population.

In Asia, however, mobile payments have been mainstream for the best part of a decade. Japan sets the benchmark for m-payments with 47 million Japanese adopting tap-and-go phones. In China alone, there will be 169 million users of tap-and-go payments in 2013. Between 500 million and 1 billion people will access financial services by mobile by 2015, depending on various estimates. The mobile financial services market will be dominated by Asia, driven by mobile operator-led initiatives in developing nations to bank the unbanked. Remittance and transfers by mobile is growing three times faster than m-banking. Mobile remittances are a form of mobile payments, essentially mobile-led P2P.

A study released in May, 2012 from MasterCard found that although the United States is ready for mobile payments, 9 of the 10 countries most prepared for the technology are in Africa, the Middle East and Asia. Ironic isn’t it that in Kenya 50 percent of the population sends money by SMS regularly, but in the US most consumers still write cheques!

Asia leading the way

In South Korea, there are more than 60 million contactless phones in use. Most use the Felica standard, but already more than 5 million NFC-enabled phones have been purchased in South Korea by eager consumers.

In 2012 almost 1/3rd of South Koreans bought music, videos, ring tones, online game subscriptions and articles from newspaper archives and other online items and charged them to their mobile phone bills, regularly evert month. This amounts to total mobile transaction revenues of 1.7 trillion won, or approximately US$1.4 billion, in 2008 alone. In 2012, there will be 21 Million Koreans watching TV via Mobile Digital Multimedia Broadcasting (or T-DMB as it is known). 40% of cellphones sold in South Korea have the capability for watching free-to-air TV in this manner.

T-Money™, electronic cash stored and refilled in SIM cards and phone chips, can be used to ride the subway and bus or buy snacks from a 7-Eleven store, vending machines or cafeterias at school. Instead of giving their children cash, Korean parents now transfer money to their kids’ T-money account.

“If I leave my wallet at home, I may not notice it for the whole day. But if I lose my cellphone, my life will start stumbling right there in the subway.”-21 year-old Kim Hee-young, Sookmyung Women’s University
NYTimes Article May 2009[1]

e-Money and mobile payments started in Japan in 1999 and usage is growing exponentially. e-Money and mobile payments already today are an important and big part of Japan’s economy. Japan leads the way in mobile commerce today with 75 percent of the population on a ‘smartphone’ and more than 40 percent of Internet users having made a purchase on their phone.

In 2003 SONY’s FeLiCa IC semiconductor chips were combined with mobile phones to introduce the first “wallet phones” (“Osaifu keitai” – おサイフケータイ). Today the majority of mobile phones in Japan are wallet phones.

Mobile Payments are not an emerging technology

The two parallel systems in Japan today are Edy and MobileSUICA. Edy stands for Euro, Dollar, Yen, expressing the hope for global success ― Intel Capital believes in this success and has invested in the company that runs Edy: BitWallet (backed by SONY). MobileSuica (also known as Felica) is a service for Osaifu Keitai mobile phones, first launched on 28 January 2006 by NTTDoCoMo and also offered by SoftBankMobile and Willcom. Initially used for commuters travelling on Japanese rail networks, today mobile ticketing payments are used by more than 90 percent of Japanese commuters.

Electronic money became popularised around 2007 in Japan, when two major retailers, Aeon and Seven & I, started their own versions of electronic money. The transactions by Aeon and Seven & I account for roughly 50% of all transactions in Japan still today.

Just to highlight how huge the e-money market is in Japan: Transaction volumes at Edy, the country’s biggest prepaid e-money issuer, nearly doubled in 2010 to 1.4 trillion yen (US $15 billion). To put that in perspective, PayPal did $4Bn in Mobile Payments in 2011, well behind just this one mobile payments scheme in Japan alone.

Between Edy and Suica, more than 84 million mobile contactless payments transactions take place every month[2], through around 450,000 merchants or outlets. Between retailers AEON, PASMO and NANACO (Seven & I) another 120 million mobile contactless payments are made every month, at another 300,000 merchants.

Yep, Mobile Payments are not an emerging trend or something to worry about in the future – they are mainstream and they are now.

[1] “In South Korea, All of Life is Mobile”, NYTimes May 2009,

[2] Source:

Mobile Banking versus the Mobile Wallet?

In Customer Experience, Mobile Banking, Mobile Payments, Retail Banking on February 23, 2012 at 06:16

With recent news that Barclays Pin-git (or is it Ping-it) has had 120,000 downloads in 5 days, that Square has 1m merchants on their payments platform (1/8th of all US card merchants/retailers) and Starbucks is doing 25% of it’s North American payments via a cardless App – it seems like Mobile Payments are taking off like the H1N1 virus. The interesting thing is that many bankers are looking at all of this activity as if it has little meaning or impact on their business at this point in time. I think part of that may be that there is a fundamental misunderstanding of how the mobile can be utilized in the banking and payments space.

120,00 downloads in 5-day for Barclay’s PingIt

When showing glimpses of Movenbank’s Mobile App I often get asked by bankers whether it is a mobile wallet or a mobile banking app? It’s as if the two worlds of cards/payments and banking are destined never to meet when it comes to a conventional view of the banking world. In banks today, we even institutionalize this by having cards as a separate division or business unit, separate from the retail banking function. The only time they ever seem to meet is in the form of a debit card or within internet banking. But the cards business, while being a strong revenue earner generally for banks because of credit card fees and interest margin, philosophically is not really considered banking per se by most die-hard bankers.

In fact, I’ve known banks where if you walk into a branch, the teller needs to call the call centre to find out any information about your credit card, even your balance. With many of the banks I work with, in-branch or in the contact centre, CSRs/Tellers need to navigate between separate screens to see your credit card details and activity versus transactions in your checking account.

For a long time these two worlds have remained largely operationally separate. The popularization of the smartphone is destined to destroy that division of labor.

The world of Two Channels

Today retail banking is emerging out of the hyperconnected, digital transformation age as not much more than a collection of channels and utility. In the past, you had branches which were THE distribution channel, but that has rapidly fragmented. You also had cheques and cards which provided you a mechanism, or utility, for moving your money around. Historically banking was really about two primary things – storing or protecting assets, and helping in the conduct of trade and commerce. Rudimentary cheques (or bills of exchange) were around almost 800 years before physical currency, and prior to bank branches ‘assets’ were often stored in temples and palaces. At the core of banking was assets that you either kept safe, or moved around to effect trade. In many ways, that’s still at the core of the bank value proposition.

As some of you may have noted in BANK 2.0 I call out bankers for calling digital channels ‘alternative’ or e-channels because of the psychology internally within banks that tends to put these channels in a subordinate role to the branch. Recently I was approached by a recruiter looking at placing a global head of ‘E-Channels’ into one of the big global brands and asking me for my input into how could take on the role. I told the recruiter that any digital guy worth his salt would immediately stay away from this major banking brand, largely because the decision to classify the role as a head of ‘E-Channels’ already told me everything I needed to know about the brand – that they still thought of digital as ‘E’ rather than mainstream, everyday banking. That told me that anyone taking on this role would still be faced with massive inertia around branch networks and would be fighting everyday to justify budget, investment and mindshare in the total channel experience – and that is why I said this brand was not ready.

With Internet Banking being the primary day-to-day channel for banking in the developed world, and branch frequency/visitation off 90% from it’s peak in the mid-90s, the branch is really ‘alternative’ banking today, rather than pride of place at the core of banking behavior. So the pendulum has shifted.

So what are the two emerging channels?

If you characterize banking today from a day-to-day perspective, you’ve really got two core classes of activity. Payments AND day-to-day banking based on your assets, including applying for new products, wealth management engagement, etc. If you look at either customer engagement, transactional activity or the role of an advisor in respect to your assets, you’d be hard pressed to identify activities that aren’t done through either Payments Channels or Delivery Channels (credit to Terence Roche @Gonzobanker for this insight).

Given the way retail banking is structured today, this means that many banks look at a mobile wallet as an instantiation of payments – the ultimate, downloadable payment channel ‘function’ or utility.  However, they look at Mobile Banking as a mobile-enabled version of the Internet banking platform, which is ultimately just channel migration of transaction activity from branch to digital – hence, a delivery utility. Some progressive banks are even looking at onboarding customers entirely electronically through the web, mobile, ATM or call centre – without a signature. More delivery channels. The branch is the premier delivery channel still, and more so as transactions shift out of the branch, and it becomes about high touch sales and service (delivery of revenue and service).

When two worlds collide

The problem philosophically for retail banks is that the mobile device is collapsing this view of the world. Payments and traditional day-to-day banking utility will be packaged into one portable, handheld ‘channel’. It doesn’t make sense to have one app for ‘banking’ and one app for ‘payments’ or the wallet, you must have the utility of both the bank and payments capability in one.

That presents an organizational shift because it merges the two disparate parts of retail banking, but it also presents massive opportunities.

What is possible is that my day-to-day connection with my money is far tighter than it is in a traditional banking relationship. Whether it is simply the fact that I can see my balance before and after I make a payment (not possible with plastic, cheques or cash) or whether you can start to advise me day-to-day on how to utilize my money better – the opportunity for mobile is not the wallet, and not mobile banking. It is re-imagining the utility of banking from a mobile perspective.

When your Telco becomes a Bank

In Customer Experience, Economics, Future of Banking, Mobile Banking, Mobile Payments on September 8, 2011 at 16:46

The announcement that the Canadian carrier Rogers Telecom has applied for a banking license should hardly come as a shock to the retail banking fraternity. There is already a plethera of mobile carriers fully engaged in mobile payments right now, from Safaricom in Kenya, Orange (with Barclays) in the UK, the ISIS collaboration in the US, LG Telecom in South Korea, and the list goes on. Everywhere you look right now, there are carriers trying to muscle in on the mobile wallet and payments space.

Should Banks be Worried?

They should be terrified.

The fact is that it makes perfect sense for mobile operators to start thinking about offering banking products and services as we dispense with plastic and start using our mobile phones as payment devices. Increasingly, banks are being detached from the end consumer by a technology layer. Let me prove it.

PayPal reinvented the customer experience layer around payments, and in doing so set the benchmark by which Peer-to-Peer payments are made. Sure there are banks at the back-end of PayPal, but today I can take out my phone or get online and send you money and all I need to know is your email address or your mobile phone number. This is compared with the average wire transfer which requires account number, account name, bank name, bank address, SWIFT Code/ABA Routing Number or IBAN, etc, etc. Now we’re all wondering why it’s simpler, and in many cases cheaper, to use PayPal than a wire transfer through our traditional bank. Why go back to complexity and friction?

Today, if a bank wants to allow their customers access to Mobile Banking they have to go through a layer of technology called an App Store (or Marketplace). Sure, there is HTML5 and mini-browser mobile sites, but the fact is that if you want best-in-class interaction and engagement, you need to go App. So today, a bank must ask Google, Apple or RIM for permission to have clients access their bank via a smartphone.

Mobile Carriers are a significant threat to day-to-day banking

Are Telcos a Threat to the High Street Bank?

Well, yes and no.

If you look at broader offerings of financial service products, then mobile operators really don’t want to play in that arena. What most of the mobile operators are looking to do is play in the payments space, taking control of the wallet on your phone or offering pre-paid debit card type services.

In 2008 about 17% of the US mobile subscriber base were on prepaid deals, but since the GFC (Global Financial Crisis) approximately 65% of net new subscribers are prepaid users. In emerging markets like India and China 90%+ of the subscriber base is prepaid, and the same counts for sub-Saharan Africa, and broadly across Eastern Europe and Asia. So what does this have to do with banking?

Prepaid subscribers for mobile phones generally speaking are more likely to be at the lower end of the scale for retail banking (less profitable, underbanked) or even in the unbanked segments. These are customers who don’t have extensive multi-bank relationships, and who increasingly are moving to products like prepaid debit cards to facilitate their day-to-day banking needs.

So guess what happens when you combine a prepaid debit card with a prepaid mobile phone? It’s a marriage made in heaven! What’s the difference between making a telephone call, an ATM withdrawal or a debit card transaction at a merchant – they are all just transactions from a value store.

It’s likely that as Telcos figure this ‘secret’ out that they will be aggressively going after that marginal layer of customers that are underbanked, and promising utility that a bank can’t provide in the payments space. The combination of prepaid phone deal with a prepaid debit card will likely result in the loss of around 10% of the retail banking consumer market in developed economies in the next 5 years in my opinion, as they migrate to this type of modality.

So What? We can Afford to Lose a Few Marginal Customers!

This will be the justification for lack of action from many retail banks; that the loss of these less profitable customers is not a bad thing. There’s two problems with that logic.

Firstly, this shift will create momentum behind changing payments behavior that will fragment day-to-day banking for many customers. Increasingly even your best, most profitable customers will be abandoning the old ways of payments to go for the utility of a combined mobile phone and payment device. Once I am managing your day-to-day spending activity, I can start to influence your decisions, spending and choices for more complex financial products too.

Secondly, the fact is that even these ‘marginal customers will likely be extremely profitable for Telcos, because to them it is just new revenue, and they don’t have all the expensive infrastructure that banks have around the very traditional (some would say antiquated) retail banking system.

The implications for banks is that they lose touch day-to-day with customers, and the day-to-day retail front-end of banking becomes owned by telcos, App stores, social networks and marketing organizations. The bank becomes the back-end manager of risk and the product manufacturer, with the lowest margin of the whole value chain.

The Total Disruption of Bank Distribution – Part 4

In Branch Strategy, Engagement Banking, Future of Banking, Mobile Banking, Retail Banking on July 26, 2011 at 06:48

The Widening Gap between Behavior and Capability

In 1980 the average bank in the developed world would receive a visit from a customer once or twice a month, making an average of 20-25 times a year. As ATM machines started to emerge, by the end of the 80s average branch visits per customer were already starting to level off as the primary reason for visiting the branch – to get cash – was moving to the ATM.

In the early 90s to combat this decline in visitation trend banks started to create specialist branches around High-Net-Worth-Individuals, and seek to attract the most affluent and profitable customers back to the branch. This strategy was successful in attracting new and highly profitable customer segments stimulated by loyalty programs, specialist branches and better service, but could it last?

Internet Banking Disrupts Banking Behavior

The reality was that it wasn’t until around 2006 that Internet Banking fully reached its potential as a disruptor. By 2006 the trend for Internet Banking adoption had become very clear, it was ready to overtake the branch as the preferred method of day-to-day banking. Between 2005 and 2009 Internet Banking usage doubled, and across the United States, UK and throughout most of the EU, Internet banking emerged as the leading channel for day-to-day access to banking services.

The perception reinforced by some within the retail banking set was that this emerging behavior around Internet Banking was isolated to newer generations of customers only, and that older, more established customers were still keen to have the personal experience of a face-to-face interaction, or that customers seeking to start a relationship would always opt for the richer experience of the branch. However, the data did not bear this out. The earliest adopters of Internet Banking turned out to be the time-poor, affluent HNWI segments who valued their time over the upside of a branch visit. They could afford computers, the fastest Internet connections and had a strong incentive to use iBanking – they sought convenience and time saving.

In 1985 70% of transactions occurred through physical artifacts and networks, namely Branches, Cash and Cheques. By 2010, however, 75-90% of retail banking transactions were processed through Internet, Call Centres, Mobile Devices and ATM machines. Today branches make up at best around 5-13% of total transactional traffic, and that is on a good day. As a result, branch staff are poorly motivated and in many markets staff turnover is toping 40% annually. The average customer is now visiting a branch in the United States less than 5 times a year, in some EU markets the average is less than half this number. This is resulting in massive closures of bank branches. That number doesn’t get better if you look at it another way – it’s just bad news for branch focused brands.

RBS is closing 55 branches this year, this is the behavioral effect

In 1990 11 million cheques a day were written in the UK, by 2003 that figure had ballooned to 36 million cheques a day. By 2010, however, Internet Banking had caused that figure to crash dramatically to less than 1 million cheques per day. Why? Behavior has irreversibly changed. What used to be second nature to many is now a dwindling holdover for an ever shrinking demographic; those who hark back to the days of good old fashion banking.

What happens in the next 5 years?

Today we’re seeing mobile banking take off as the fastest ever growing channel for retail banking services. Today some banks are reporting a 300-500% faster adoption of Mobile Internet Banking than what they saw with Internet Banking. Rather than take traffic away from Internet Banking, the trend is for mobile banking users to actually increase their use of Internet Banking.

So what’s more likely in the next 5 years? Is it more likely that customers will suddenly, spontaneously buck all these trends and spontaneously start using branches more, or will Internet and Mobile simply increase their march of dominance for day-to-day banking? The answer is obvious (to most).

Why, then, do branch networks still command the massive bias in funding that they have today within retail banking P&L, and why do leaders in the digital space struggle for board-level attention and legitimacy?

It’s not about Internet vs Branch, it’s about behavior

We’re not going back to vinyl records, the telegraph, or steam powered transport – we’re just as likely to go back to a banking system dominated by branches and cheques. This is an undeniable, statistical truth. The majority of us now (over 50% in developed economies) are simply too busy to drive down the branch, find a parking spot, stand in line for 15-20 minutes, to hand over the counter a cheque that will take 3 days to clear for a nominal processing fee. But it’s not just transactional behavior that takes the hit.

Today if I’m looking to start a new relationship with a bank, the first place I go is to my search engine, and possibly my social networks. Admittedly there are still some who will seek to visit a branch to kick off a new relationship, but after that initial visit my day-to-day banking becomes pure utility and convenience. In 2007 when I worked on a global survey for Standard Chartered, 75% of customers in 42 countries said that Internet Banking capability was their primary criteria for deciding on a new banking provider. Regardless of whether I might come into the branch to get started, the fact is you aren’t going to be seeing a lot of me. That’s not the way I behave anymore.

By continuing to favor branch from a channel investment perspective or organizationally from a strategy perspective, and by insisting on multi-year business cases before making real investments in mobile, social media and web, we are opening up a gap. This gap is a behavioral gap between how our customers behave everyday, how they want to bank, and how prepared “the bank” is to facilitate their needs. This gap can easily be exploited.

The more banks insist on me conforming to their behavior and processes, the more I will feel the bank is irrelevant, out-of-date and a poor match with my needs. I’ll start to find workarounds like PayPal for transfers, or Prepaid Debit cards for day-to-day billing and payments. I’ll start to move my cash to other banks that have a mobile banking and iPad App.

There are many who will argue that this is not enough to kill the branch – I say you won’t be able to afford not to kill them off yourself very soon.

The Total Disruption of Bank Distribution – Part 2

In Bank Innovation, Customer Experience, Future of Banking, Internet Banking, Mobile Banking, Technology Innovation on July 7, 2011 at 05:30

Rapid Acceleration of Technology Adoption makes change easier

The rate of diffusion is the speed at which a new idea spreads from one consumer to the next. Adoption is similar to diffusion except that it also deals with the psychological processes an individual goes through, rather than an aggregate market process. Since the late 1800s the rates of technology adoption and diffusion into society have both been steadily getting faster. While the telephone took approximately 50 years to reach critical mass, television took just half that (around 23–25 years), cell phones and PCs about 12–14 years (half again), the Internet took just seven years (half again), the iPod 3 years (half again) and Facebook was able to reach 200 million users in just over 1 year.

A very real part of the acceleration of technology is the application of Moore’s Law, named after Gordon Moore one of Intel’s founders and the individual credited with inventing the integrated circuit. Since 1967 Moore’s Law has predicted that every 2 years the power of a chip will double in processing capacity/speed. That means that the iPad you get in 2 years time, will be twice as fast as the one you have now. To illustrate Moore’s Law the 1Ghz chips now powering smartphones and tablets are exactly 1 million times the speed and capability of the Apollo 11 guidance computer that took Neil Armstrong and Buzz Aldrin to the moon.

Ultimately, this means that consumers are now adopting new technologies and initiatives such as the iPad and Facebook en masse in a period measuring months, not years. As we all become used to this rapid technology improvement, it is taking us less time to adopt these technologies into our lives, and this further increases the magnitude of impact on business. Let me give you an example of how this impacts banks specifically.

Internet versus Mobile Banking

The web launched in 1994, but most banks didn’t understand the significance of the web and lagged in the provision of Internet Banking services, waiting until 2000 or 2001. That’s 7 years from the start of the commercial web to the launch of Internet Banking for most banks. The iPhone launched in July of 2007 and in doing so created the market for “Apps” and increased our expectation of mobile interactions. Within a year more than 1 Billion Apps had been downloaded from iTunes, by 2010 that number had exceeded 10 Billion downloads. As a bank, ask yourself whether you could successfully argue for delaying the deployment of a mobile banking solution until 2014; 7 years after the iPhone’s release? Unimaginable.

Mobile Internet Banking is being adopted 300-500% faster than Internet banking was adopted, mobile payments will be even faster again. Thus, if you’re a bank, by 2015 your #1 channel for day-to-day retail banking will be Mobile, then Web, then the ATM, then Call Centre, and at #5 Branch.

Isn’t it ironic that banks today need to ask Google and Apple for permission to allow customers to access their bank through a mobile App? Today, some 17-year-old developer can develop an iPhone App in 2-3 weeks that would rival what it takes a bank 9 months to deploy. We’re increasingly going to find ourselves playing catch up, especially when it comes to new customer experience on devices like the App Phones, Tablets, etc.

It has long been argued that a face-to-face or human based interaction is vastly superior to that of a technology one. There are two issues that undermine this school of thought. Firstly, regardless of whether a face-to-face interaction might be better for a customer, increasingly we’re opting NOT to go the face-to-face route in favor of the simple convenience and utility afforded by technology. Secondly, with the incredible advance in recent times of customer experience, persuasion and interaction design, and the application of usability sciences, the fact is that technology is now competing head-to-head with traditional approaches to customer engagement, and winning.

So what comes next?

The use of gesture-based interfaces such as Oblong’s TAMPER and as demonstrated by various XBox Kinect hacks show that technology is becoming more natural, more intuitive. Image recognition technologies are now allowing digital signage to recognize whether you are male or female, happy or sad, and respond with a real-time offer accordingly. Avatars and voice recognition technologies are being combined to create customer support response systems that are act like a human agent, but are effectively IVR 2.0s.

Itautec's 3D gesture-based ATM and SapientNitro's Happy Smile Ice Cream Vending Machine are two simple examples of rich device experiences

Today, PayPal allows us to transfer money using a mobile phone number or email address, as compared with a routing number, ACH number, SWIFT code or account number, and in doing so provides a vastly superior person-to-person transfer process, especially when compared with a unwieldy branch experience. Very soon even cash, plastic and cheques will be succumb to the mobile phone as P2P and NFC become the norm – not because of technology, but because it is simpler and more convenient. Just as Internet Banking is the preferred channel of choice today.

Banking Everyday, but never at a bank

More than improved interaction is happening though. Social media, geo-location services, augmented reality, and predictive analytics, are forcing us to think about the application of banking and other services contextually. Banks are going to have to offer banking when and where you are, not force you to the branch or the bank’s website as the sole choice of applying for products or services. Banking will be something you do everyday, but not at a bank. Banks won’t be able to compete unless they can fulfill in real-time, as consumers need the product or service that is ‘banking’.

Regardless of what you think of the service proposition of a branch versus multi-channel technology, the fact is, it’s all going to be about context, relevance and delivery. Branch just won’t be able to compete long-term with such expectations driving the experience. Change will happen because you simply can’t defend traditional approaches that turn out to be inferior to the customer experiences that are emerging through technology.