The majority of banking will eventually be done on the mobile channel, believes David Urbano director of mobile and social media, at La Caixa bank in Spain, and the shift is already underway he told Neil Ainger at the recent Mobey Day event in Barcelona on 21 March at CosmoCaxia.
The day when we see the majority of banking being done on the mobile channel is not as far in the future as some people seem to think. “It is not 10 to 20 years into the future, it will be much much less than that,” says David Urbano, director of mobile and social media, at La Caixa bank in Spain, who is understandably reluctant to put an exact date on it but definitely believes that a tipping point will soon be upon us. “We currently have almost four million active customers who bank with us using the internet, but within three years’ time I expect to see a similar number using the mobile channel.
“We have already detected approximately 30,000 retail bank customers who only ever use our various mobile services [from account checking, to transfers, to Mobile Contactless Payment (MCP) and bill payment services],” adds Urbano. “These early adopters almost all use the iPhone or Google’s Android operating system on various different handsets. We don’t know if they are Generation Y youngsters, but presume they are, and we firmly believe that many others will soon follow in their footsteps.”
La Caixa’s strategy, like many other banks, is to move customers from their branches to their digital channels so that they do their transactions virtually, leaving the real estate branches to sell high end products such as mortgages, saving plans and investments. The bank offers numerous different services, such as fairly simple mobile bank account checking services that link to existing websites, SMS alerts, native mobile apps, mobile payments and so forth. It has 2.5 million registered mobile customers at present, says Urbano, who can access 200 different services with more than one million ‘transactions’ happening each day.
“Spain is a very advanced country in terms of its mobile financial services offerings,” says Urbano, citing his own bank’s contactless ATMs developed with Fujitsu, its ground-breaking Mobile Contactless Payment (MCP) schemes in Sitges and the Balearic islands carried out with Visa and Telefonica, which allow customers to tap and pay for goods under EUR20 in thousands of shops (a PIN is necessary above EUR20), and its smartTV app developed with Samsung, among much else. Santander, Bankinter and BBVA have all contributed to the thriving mobile FS scene in Spain which certainly outdoes many other developed markets, if not quite matching some emerging countries such as Turkey, where less legacy systems encourages more innovation.
The priority for La Caixa is to offer as many different mobile services as possible across all the different operating systems and end point devices, from smartphones to tablets, emphasising the customer experience at all times. Whether an app is native to the mobile phone or accessed via the internet isn’t the key point. What matters is that banks are ready for the mobile revolution and Urbano believes that his bank is.
La Caixa, for instance, is working on fun apps at the moment to reflect the ‘gamification’ trend in the mobile arena with Urbano describing an application that can accept a picture taken in a car showroom and then let customers enter their savings against the cost of that car each month. The aforementioned smartTV app that took five months to develop with Samsung in Korea, but only allows customers to check their account balances and recent transactions at present, will be further developed by year end with new more interactive functionality added. “We will also be launching a Google TV app in the US this summer and will do the same for Apple TV too,” says Urbano, before cautioning that the latter may take some months to validate, as anyone who has ever developed an application for the AppStore can testify to.
“We are currently in negotiations with Telefonica, Vodafone and Orange to get space on their UICC SIM cards by the end of the year as well,” says Urbano which will allow the bank to rollout credit and debit cards on the MNO networks, and to participate in further MCP schemes using Near Field Communication (NFC) technology in the future, just as they have in Sitges and the Balearic islands. “We know it takes time to encourage customer and merchant uptake and to rollout the acceptance infrastructure, but I firmly believe that NFC-enabled MCP will take off in the next three to four years.”
Mobile World Congress
This assertion is not that surprising when you consider La Caixa’s recent announcement at the huge Mobile World Congress trade show in Barcelona that they would be working with the local council and various other partners to make the Catalan capital a fully contactless city, including contactless cards and phones. The bank and its partners intend to build out the Point-of-Sale (PoS) acceptance infrastructure across shops, transport and museums and distribute access mechanisms on cards and mobiles to bank customers across the city.
Organised by the GSM Association, the MWC show attracts thousands and thousands of delegates and is the mobile show in Europe if not the world to attend. “The Barcelona contactless city project is a big deal for us,” explains Urbano, before going on to share what else impressed him at MWC, principally the announcement of the Visa and Vodafone partnership which gives the card scheme’s pre-paid mobile wallet access to some 40 million Vodafone customers in the developed world. “There was nothing spectacular in term of handset devices, however,” adds Urbano, perhaps lamenting the lack of an iPhone 5 or the like.
The power of crowd sourcing is something else that interests La Caixa with Urbano keen to talk up his bank’s FinAppsParty, which attracted 83 independent software developers to Barcelona in November last year, to compete for six prizes of EUR2,000 and a chance to have their ideas developed by the bank. “45 different ideas were generated over a 24 hour period and we are now following a number of them up. We would also like to take the FinAppsParty around the world with UK, US and other ‘parties’ held around the globe before these local finalists return to Barcelona for the annual extravaganza in our home city.”
It is quite an ambition to effectively try to launch their very own Finovate show in the mobile FS arena, but then you could never accuse La Caixa bank of lacking ambition. And if the financial services sector is indeed reaching a tipping point, where the majority of banking will be done on mobiles in the near future as Urbano predicts, then having a host of independent developers come to you with their ideas could prove to be a smart idea.