Research suggests that the number of smartphone users worldwide will surpass 2 billion in 2016. This phenomenon has brought about both great opportunities and huge disruption in the personal banking and commerce sectors. Financial institutions now have the opportunity to engage with their customers in a highly contextual and personal manner.
What are the current challenges for banks implementing mobile commerce?
In order to capitalise on this and not only meet but exceed customer expectations, financial institutions need a laser-sharp focus on the delivery of fast, consistent, rich and above all, safe, experiences across all devices, browsers, networks and locations.
It is worth putting the opportunity into context. According to research we recently carried out, mobile and tablet users in the UK are engaging online with their banks more frequently than users of desktop devices. In fact, whilst UK online bankers participate in bank account monitoring up to 30% more often than online shoppers search, they are also more likely to be using a mobile device to carry out this task than any other device. Compared with other countries, including the US, France, Germany and Japan, UK consumers are more actively engaging on their mobiles with banking services, not just for account monitoring, but also to check their balance and to transfer money between accounts.
There is an imperative, therefore, for banks and financial institutions to implement solid mobile strategies, and this will grow in importance as we continue to see high street branches closing and bank services becoming more automated. Whilst consumers are clearly willing to engage through smartphones, they are often unaware of all the mobile apps that are available to them, so one of the key challenges for financial institutions is to build awareness.
Another major challenge is the proliferation of devices. There are so many different devices on the market, and more entering every day. Each of these mobile devices has different processing power, different screen dimensions, different pixel density, and different sensors, which makes delivering engaging, secure and reliable mobile experiences more and more complicated. Banks are best positioned to meet this challenge by utilising Responsive Web Design (RWD), which uses a single code base that is able to adjust the way pages are presented based on device characteristics. For mobile users engaging with a bank’s website, RWD will help ensure that the performance of that website has been fully optimised, that the pages will be quick to load and that transactions can be completed in a timely fashion. As part of this, banks can build in performance testing, so they can measure the speed, responsiveness and quality of their mobile-optimised site on a regular basis.
This has got to be seen as a priority. If banks and financial services institutions fall behind in employing RWD and web optimisation, they risk alienating their most active and engaged customers. The fact is that financial services consumers have higher expectations than those engaging through ecommerce (according to the Akamai research, 19% expect pages to load instantly and 25% within one second or less), so although it is difficult to deliver a high-performing rich desktop-level experience on a mobile, it is essential to achieve it in order to secure the long term loyalty of customers.
Security remains a main concern. Our research indicates that UK consumers have the highest expectations for secure web experiences, with 76% expecting their personal information to be kept secure and private. When expanding mobile services, financial institutions must be sensitive to these security concerns and take an end-to-end approach to developing multi-layered defence systems that are “always on”. They must be proactive and use cloud-based security to protect their perimeter against potential attacks. This protection needs to extend beyond the boundaries of their infrastructure and across the Internet to the very edge of the network itself. As mobile driven revenues increase, it is inevitable that cyber criminals will increasingly turn their attention to this channel.
To fully embrace the mobile opportunity, financial institutions must also overcome the challenges in delivering mobile payment security. There are successful mobile payment methods throughout Europe. In the UK, Barclays launched Pingit in 2012, which allows the easy transfer of money between users and payments to businesses. It has apps available for iOS, Android and Blackberry and can be downloaded free. According to Barclays it has been downloaded and installed 3 million times and by spring 2014 had processed nearly £525 million in payments. The British Standards Institute has recognised Pingit for its commitment to secure payments. The Dutch organisation, iDEAL which processed over 140 million transactions in 2014 and accounts for 54% marketshare has a mobile optimised checkout which drives mobile commerce spending and maintains a high level of security by using two-factor authentication and does not share sensitive information, such as credit card numbers, with the merchant. Another innovator in this space is Spain’s hugely successful BBVA wallet which achieved over 250,000 subscribers within 8 months of launch. BBVA has achieved this level of adoption by shifting the focus to earning the trust of its customers and understanding that the architectural design needed to address security must be infrastructure independent.
Mobile users, whilst being discerning about their expectations, also represent the greatest source of long-term custom and future revenue for banks and financial institutions. Delivering a website is no longer enough; to ensure loyalty, financial institutions need to ensure a mobile-optimised, rich experience that is focused on the customer and guarantees reliability, security and instant responsiveness.
By Cheryl Chiodi, Industry Marketing Manager, Financial Services at Akamai Technologies.