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Michael Nuciforo - Keatan

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Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.

A Balanced View

08 July 2012  |  4872 views  |  2

Viewing a balance is by far the number one transaction conducted in Mobile banking.  Eighty per cent of the time it is the only activity done by a customer after they login.  That’s right.  Eight out of ten times a customer logs in; they view their balance and log right back out.  The other 20 per cent of activity is made up of viewing transaction history and making payments or transfers.  Why then do banks force customers to jump through so many hoops to just view their balance?  Forcing customers to re-use their online banking credentials, card readers and security tokens is just plain lazy.  Banks are allowing login procedures to be dictated by a series of transactions most people hardly do.

 

Long term sufferers of ‘login rage’ will know what I am talking about.  At the best end, some banks rely on a short passcode only, others utilise the same details as online banking, whilst some require everything but the kitchen sink.  Customers use Mobile banking services for speed and convenience.  They therefore want fast and easy access to financial information.  I for one would love to have the choice to access my account balances without logging in.  I never share my device, and if it was stolen, being able to see to my account balance would be one of the least of my concerns.  Considering log in times on a mobile can range between 10-30 seconds a pop, and  the average customers logins 20 times a month, you can see how it starts to add up for everyone.

 

Before you say, but what about security and what about privacy? At the end of the day, allowing customers to View Balance without logging in, is the same as sending paper statements to customers through snail mail.  I could easily ruffle through my neighbour’s mail, find a bank branded envelope and chances are I would open a paper statement.  No difference.    The great advantage about a Mobile is that generally speaking, it isn’t a shared device.  Most people never let it out their hands, let alone their sight.  So why do you have to log in? The tradition of logging in has just been inherited from online banking, a less secure channel, a web based channel that can easily be breached by fraudsters globally. 

 

So how would this work? Firstly the service would need to be deployed via a native application.  Native applications, especially those deployed through the Apple platform, are intrinsically more secure.  By deploying native, banks can create a link between the app, the customer and the device.  This means that whilst fraud can theoretically still occur, it can only happen on a one-to-one basis.  Not a one-to-many.  The fraudster would need to steal the device before they could do anything.  This is the polar opposite to web based Online banking services. Fraudsters in Nigeria could phish the password of a HSBC customer in London and access their account details by logging in from Lagos.  If they phished the Mobile banking password of the same customer, they couldn’t do anything with it because they would need the device as well.

 

I will be the first to admit that the service isn’t for everyone.  Some people just won’t feel comfortable knowing that their account balance is available to anyone who picks up their device.  Allowing customers to customise and manage the service is therefore an important consideration. Users must have the ability to switch the feature on or off.  Banks also need to provide flexibility around what accounts are shown and in what format.  Some customers might feel comfortable only seeing their saving’s account rather than their mortgage.  The service could be deployed as part of an existing app, or a completely standalone app. As always, it depends on what your customers want, and what your overarching strategy is. 

 

In France, BNP Paribas and Societe Generale both allow customers to access their account balance on their mobile without the need to log in. Westpac New Zealand offers the service as a standalone ‘Cash Tank’ app whilst US bank, Southbank, has also launched ‘Shake and Bank’.  It's an iPhone app that shows the account balance at the shake of a device.  It is now time for the UK to embrace this innovative approach.  Both HSBC and Co-Operative launched similar balance only Mobile services over the last few months. Both apps would have been ripe for this capability.

 

In terms of benefits, the service is going to please your hardcode Mobile banking customers the most.  Customer satisfaction will increase and it’s a great proof point for your brand.  From a hard benefits perspective, password resets are the number one contact enquiry to the call centre.  By introducing this service you are likely to reduce the volume of these calls and therefore your operational costs.  They are however some repercussions.  Some banks rely on balance information as an option for identifying a customer.  These processes will need to be updated accordingly.  The increase in View Balance calls to the platform will mean additional hardware capacity will also be required.  As volumes grow you want to ensure you don’t suffer from any performance degradation.

 

At the end of the day, isn’t it a banks duty to deliver a convenient and simply service?  Well, that is what they all claim in their advertising campaigns.  It’s time for the replication of existing processes from other channels to stop.  Mobile has a set of unique capabilities that mean the channel can be used to redefine the story of banking.  As competition heats up and the Mobile channel matures, banks will not be judged on the Mobile banking services they offer, but rather, how they offer them.  At the very least, delivering this service ensures that the most popular activity is available to customers with the smallest amount of friction. Something that should set a good example for the rest of the industry.

TagsMobile & onlineRetail banking

Comments: (4)

Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 10 July, 2012, 19:37

Fully agree. Without saying it in as many words, you've made the oft-missed point that a mobile banking app installed on a registered mobile phone automatically achieves one-factor authentication. It's really questionable if the app must also demand a password and thereby achieve two-factor authentication for something simple like account balance inquiry. Traditionally, banks have seen mobile banking as an adjunct of Internet Banking - many banks I know activate mobile banking only to those customers who are registered for Internet Banking. From the long list of banks you have cited who are launching instant balance inquiry on mobile phones, I am heartened to note that the traditional thinking is making way for a more sensible treatment of mobile as an independent, powerful channel in itself. 

While banks are at it, I hope they throw personalized offers and a few more things outside the walled garden. They should realize that Tap Buy, Times intARact and a few other nonbanking offer providers actually use push notification technology to proactively push out offers on the smartphones of registered users who don't even have to fire up the app, let alone enter a password.

Michael Nuciforo - Keatan - London | 10 July, 2012, 19:44

Thanks Ketharaman, some really valid points.

A Finextra member | 14 July, 2012, 11:56

HSBC started using a keyfob and onetime password.  I never had the fob when I needed to just check a transaction or balance.  So I dropped HSBC and told them the reason - too inconvenient. Went back to my old bank.

Totally agree it is needed to action anything meaningful.

Michael Nuciforo - Keatan - London | 14 July, 2012, 12:06

The sad thing is, someone at HSBC approved that customer journey.  It's actually not stupidity, it's just plan laziness

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