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Leading a horse to water

It’s been an interesting couple of months in the mobile banking space – with mobile finance platforms entering the market from Apple (announced at this week’s WWDC) and another announced in May from MasterCard. Banks are being given yet another reminder that the mobile banking & finance space is quickly being populated with a variety of offers. The key of course is convincing the banks that there is a need to invest in mobile banking architecture at a time of general austerity - they will be looking for the proof behind the promised value of mobile banking. The pool is now full of water, but will the banks drink?

Fortunately, Capgemini’s recent World Retail Banking Report 2012 gives some insight at what could motivate the banks to take the mobile banking plunge:

The initial argument is one of loyalty – Capgemini’s research found that nine percent of customers are likely to leave their banks in the next six months while 40 percent are unsure they’ll stay long term. As banks compete to attract new customers and keep existing ones, our research into the subject[1] has shown that consumers that utilise mobile banking are 97% more likely to continue using their current bank.   

The second argument is one of potential – to quote Capgemini: “While mobile banking is still in a relatively nascent state of maturity, it is a channel that will warrant more investment by banks to improve the customer experience. By 2015, more than 60% of customers worldwide will likely use mobile banking”. That may seem like quite a bold statement however it is certainly possible - depending on what services are offered via mobile banking, and if these services are context sensitive.

Simply offering payment and account checking via the mobile channel will not push 60% of users into using the mobile channel and magically enhance customer loyalty.  What does? Well, our own research has shown that, in the US at least, 66% of all consumers want to receive retailer discounts from their banks delivered directly to their smartphones – an exciting opportunity that has yet to be fully leveraged.

Customers trust banks with their money: mobile banking is a fantastic opportunity for banks to develop that relationship further, developing mobile marketing strategies that will both drive revenues and secure customer loyalty. How banks approach the challenge and how bold they are in their mobile strategy may define them in the eyes of consumers for years to come, which may explain some of the hesitation, however if Capgemini and our own research is to be believed, the horse must eventually drink.


[1] Research conducted by Information Solutions Group in March 2011 of 4,240 mobile banking consumers across every region of the United States from a variety of large and regional banks, and credit unions.


Comments: (1)

A Finextra member
A Finextra member 15 June, 2012, 13:49Be the first to give this comment the thumbs up 0 likes

Great point, Philip. Another service mostly overlooked by the banks is full control of the cards. Whenever card details are provided for payment, that could - inadvertently - trigger Continuous Authority Mandate (CAM), therefore giving the third party a right to charge that card practically "at will" (CAM provisions are usually well hidden within the fine print of  "non-plain English" T&Cs). It is far from easy to sort out CAM mess once it started. Hence, from the consumer's perspective, it is best to prevent CAM-related problems from happening in the first place, by using Vivian's (Pretty Woman) approach - "I say who, I say when, I say how much". That's what we do at TEDIPAY.

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