I have long been extolling the virtues of the mobile channel as an opportunity that banks and financial institutions cannot afford to miss out on, says Sirpa Nordlund, the executive director of the Mobey Forum, ahead of the second Mobey Day conference in Barcelona, Spain. The desktop is dead, and the laptop is dying. The age of mobility is already upon us and banks that don’t face up to this fact risk being elbowed into a back-end processing role in the mobile financial services (MFS) ecosystem.
Banks need to quit viewing mobile as just another customer channel and wake up to its potential to become a generator of significant new revenues. As the mobile financial servcies (MFS) landscape evolves and consumers demand more sophisticated and valuable financial services for their smart phones and devices, banks that fail to keep pace with the market will be overtaken by powerful and innovative new players that are entering this space.
Banks and financial institutions (FIs) have always adopted a conservative approach to technology utilisation. But erring on the side of caution will do them no favours in the mobile age. Mobile services can, for example, deliver new and actionable customer profiling data into the hands of banks, enabling them to better understand their customer base and create tailored, segmented services with greater customer appeal.
The shear range of stakeholders entering MFS is also a huge opportunity for banks. The revenue generating possibilities stemming from the development of partnerships with mobile service providers are limited only by the banks’ willingness to engage. Location-based apps, vouchers and loyalty schemes, social sharing, digital ID and gamification services are all starting to establish commercial viability. As these services ‘prove themselves’, consumers will give their trust and loyalty to the brands offering them. We have already seen retailers coming into the picture with quite a force. Here in Finland, my native country, the leading retailer has not only become a bank, but also an investment and insurance company. The recent on-going experiment with the Bitcoin digital currecny will certainly not be the last either; before we know it we will have ‘retailer money’ to use for our micro-payments. What about Starbucks coins, as they’ve already had the loyalty and reward schemes, or 7-Eleven money? It is all enitely possible, and FIs should ensure they’re not just left with the less valuable processing end of the chain.
Banks should play a pivotal role in providing a trusted and secure means of managing one’s personal finances in the easiest way possible. Given the pace of change and the strength of the new players entering this space, such as Google with its wallet, iZettle, Sqaure and others targeting the mobile point of slae (MPOS) arena, there is a real danger that the consumer will become accustomed to managing their mobile purchases, payments and other financial affairs through other means than traditional cards or bank products.
Timing, now, is everything. The clock is ticking for an FI response. Banks and other traditional players may not be on the technological cutting edge or situated in pole position for all mobile services, but given their prowess in traditional financial services they are in a strong place to retain a crucuial role on the grid. If they want a flying start, the first step is to maining relevance in the evolving MFS ecosystem is recognise that the mobile channel is different to bygone technologies. To view it as just another channel through which to reach customers, is to miss the point entirely. Mobile is a new age in banking and offers huge commercial potential for banks that are willing to open the doors to new partnerships, loyalty and customer schmes, and are open to new business models and new ways of thinking.
This is the very topic that we at the Mobey Forum, along with a host of other high profile speakers, will be addressing at the second MobeyDay 2013 one-day conference, on 11 June in Barcelona, Spain, shortly. I look forward to the discussion and hope that you will be able to join us there.