28 May 2018
Future Banking
Dharmesh Mistry

Future Banking

Dharmesh Mistry - Temenos

34Posts 160,987Views 41Comments

Mobile Banking is dead

08 October 2017  |  10696 views  |  2

I saw a post earlier this week which asked what mobile banking would look like in the future. There were a few responses discussing personal dashboards, statements with PFM insights, chat banking etc. Quite frankly nothing new.

We’re moving from transactions to experiences…

As customers we manage our money for many reasons: day to day spend, saving for a rainy day or holiday, managing a home, going to university. For each reason we have different needs. Today, we have a single banking app that facilities data and transactions with the bank, the customer uses one app to service all their needs. Why do we expect that in the future one interface / experience will continue to manage all our money management needs?

In the future, you may have one account but many apps on top to manage your individual needs. You might use something like Monzo for your day to day spend so it helps you track your general spend. If you’re a contractor, you may use Coconut to manage your work expenses and invoices. You might use CLEO to interact more easily with your account or Chip to help you achieve specific savings goals. You might use Yolt to aggregate multiple financial products so you can plan your overall finances / wealth.

Whilst some of these are banks, others are aggregators. Open Banking will enable more aggregators as should a Bank’s API strategy. The point is that customers will benefit with better experiences from apps that are very good for specific money management needs, rather than a single general purpose app where they have to figure things out for themselves. For me, it is analogous to using email for all your communication needs. Today most of us use Twitter, Chat, Facebook, SMS and email all for different purposes and appropriate experiences. I already use Cleo and Yolt on top of my bank account and have no plans to change my bank.

Complexity kills apps…

Ever tried writing a formatted document in a mobile version of Word? Internet Banking apps can have over 200 features, and with embedded PFM and engagement features, over 350. It maybe that finding the most common features is super easy, but the other features have to be catered for if you really want it to be a fully self-service model. So mobile will be great for every day, not necessarily everything.

Today most customers have 1-2 products with their bank. However, if banks want to take advantage of Open Banking and become aggregators, then not only do the features go up but so does the amount of data to display and navigate.

It’s great to talk…

Using an app either on mobile or the internet generally means you have to understand and navigate banking features using the language (in menus and buttons) of the bank. One of the reasons why chatbots are gaining popularity is that you can speak your own language. A bot with really good Natural Language Processing will do the work to understand what you want from the bank’s perspective. So saying “Send Frank $50” is interpreted as Move Money or Funds Transfer from a banking perspective.  In addition to these the more progressed chatbots have a “personality” that can add a bit of fun to your dialogue, I really do enjoy Cleo’s little animation responses.

Mobile Banking is Dead

In conclusion, interaction has evolved and is continuing to at a pace. Mobile banking evolved from Internet Banking but the future is Experience Driven Banking not Mobile.


a member-uploaded image TagsMobile & onlineRetail banking

Comments: (3)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 27 October, 2017, 12:42

Given the friction with online banking and mobile banking apps, I see myself using third-party apps even for transactions, not just experiences. I think I've commented sometime that, had bill pay functionality delivered by HDFC Bank's PayZapp been yet another feature of HDFC Bank's Mobile Banking app, I wouldn't use it half as much as I use the separate PayZapp app today.

That said, PayZapp is still a transaction app and it's still from a bank.

Coming to experiences, many third party apps emphasizing on experiences have been around for a decade. We haven't seen any of them killing a bank's online / mobile banking app during this period. I don't see any reason why they should be extraordinarily successful in killing mobile banking in the future. For at least a year, Neobanks have stopped chanting the banking disruption mantra and started singing the bank partnership tune. When they realize how difficult it is to partner with big banks, they'll switch to another song.

AFAIK, the experience paradigm is totally different from the experience of buying a product, as signified by a transaction. An example I've seen oft-quoted to illustrate the experience paradigm is to not buy a costly product and divert that money to visit a fancy restaurant, post pics on Instagram / Facebook and count the number of Likes your post has received. 

I frankly wonder how an Amazon or a neobank or a money management app will help cater to the experience paradigm.

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Dharmesh Mistry
Dharmesh Mistry - Temenos - Reading 27 October, 2017, 14:17


What do you think about Alibaba's success in FS?


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Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 27 October, 2017, 15:11


Alibaba's success in China in finserv is purely a transaction success and has nothing to do with experience paradigm. According to Chris Skinner's article titled The Truth About Ant Financial, Alibaba's success in China is of enabling finserv for people who don't have bank accounts and whom banks won't touch with a forty feet bargepole. Going by anecdotal evidence, Alibaba owes a lot of its success to "lightbrush regulation" vis-a-vis KYC and source of funds.

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