When it comes to investing in modern technology, few industries do so with the sums and gusto of the financial services (FS) industry. This behemoth sector, incorporating the capital markets, retail banking, insurance and many other industries, continually invests huge sums into IT to remain competitive and compliant in a post financial crisis world.
Such is the level of investment across financial services that different analysts have wildly varying ideas of the levels of investment in the area. Nuanced by their different definitions of banking, in 2014 Celent predicted a global bank IT spend of $188 billion, compared to Gartner’s prediction that the banking and securities market will increase its spending by 2.7 per cent, taking it up to a whopping $502 billion in 2015. If you also take into account, IDC Financial Insights expectation that the insurance industry will invest $101 billion into IT in 2015 then, despite the difference size of the numbers, the scale of investment in financial services can be interpreted.
Sound investment strategy
What is more interesting is Gartner’s expectation that spending is being driven by four main areas, consolidation, big data, compliance, and mobility. It’s on this last point that we can consider how the FS industry could invest its money in the most sensible manner. The industry has been spending significant amounts of money on developing state-of-the-art mobile customer applications while leaving their own staff back in the dark ages. Whether it is a trading platform for an investment bank trader or a mortgage assessment tool for a high street bank mortgage adviser, staff at financial institutions require high-performing and secure applications for mobile devices.
Historically the way in which institutions focus on software development for the enterprise has been at odds with the desired outcome of creating new mobile applications that will save time and money. Projects would be signed off from senior staff with little consideration for an applications’ usability with its intended audience.
In the long run, the top down waterfall approach to software development is money down the drain for the IT departments. Investing in a quick fix or director led vanity projects that don’t consider the practical application of the tool and the user experience (UX), typically result in clunky and complex software. The principles of UX are essential for any financial firm that wants to generate significant return on its investment. In this context returns are defined not just by financial rewards, but less tangible results as well.
Firms can generate significant reputational boosts from developing applications that gain the attention of the industry. Furthermore, an organisation equipping staff with tools and technology that make processes easier reduces frustration and helps keep morale high.
Unlocking mobiles securely
Today, with smartphone use almost ubiquitous and tablet use increasing in proliferation, financial services organisations have an excellent opportunity to use mobile applications to drive performance and profit. As consumers, smartphones and tablets have encouraged us to use applications in everyday scenarios, such as hailing a taxi or sharing our photographs. However, while this familiarity with consumer applications means workers can quickly adapt to enterprise applications, for businesses this presents a major problem. Organisations face a very real concern about data security as it has become accepted behavior to use a device over networks that have no guarantee of security.
Gartner highlighted the threat of mobile applications by predicting that 75 percent of mobile applications will fail basic security tests in 2015.
When these devices then make their way into the workplace as many do, when an employee uses a consumer app on the network it can make sensitive company data vulnerable. Many applications have built-in features that automatically send user data back to the developer. Where a firm lacks suitable data protection, the scope for data leakage is significant.
Enterprise organisatons need to develop enterprise applications that function with the same ease and intuition that consumer applications do, to persuade staff to use them. IT departments can then encourage the use of bespoke enterprise applications, which are straightforward to use and add value to staff while also protecting company data. This is essential to avoid the double jeopardy of losing the data and incurring a regulatory punishment as a result of the leak.
If financial firms are going to reap the business benefits of mobile technology, then it is essential that the principles of UX are central to their design. The power of mobile applications in the enterprise sector was recognised last year when Apple and IBM joined forces to develop this sector. The financial services industry should learn from this and follow suit.
Enterprise applications tended to be successful if they are accessible and easy to use. As consumers, we are used to being able to use an app from the word go and this applies to enterprise applications. No-one wants to go on a training course in how to use an application!
Another common mistake, organisations tend to make is designing a very corporate application. Although the application is made for employees rather than consumers, it’s still important that it’s interesting and people enjoy using it or they may not bother. The adoption of gamifaction techniques will also enhance any performance reward elements required.
Be it for the front or the back office teams, enterprise mobile applications have the power to bring major benefits across huge numbers of day-to-day business processes in the FS sector. Only by considering the consumerisation of mobile technology and its role in the workplace, can enterprises move away from legacy system complications and haul IT infrastructure into the modern age.
By Kevin Knowles, Managing Partner, Cavendish Wood