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We're witnessing the fastest ever shift in banking

This week we're celebrating 5 years of the Apple App store (see Wired's commentary.) The realization that in 5 years mobile and apps have had such a huge impact on banking, can not be understated. Of course, there were many in the financial services space that were massively skeptical of the iPhone and Apps when they first launched in 2007. My favorite quotes come from a January 14th, 2007 article on Bloomberg, that contain the following gems:

"The iPhone will not substantially alter the fundamental structure and challenges of the mobile industry,'' Charles Golvin, Forrester Research Inc

"Apple will sell a few to its fans, but the iPhone won't make a long-term mark on the [financial services] industry", Matthew Lynn, Bloomberg

Today it's rare for me to meet someone who doesn't understand the impact mobile is having on our industry, but back in 2009 when I started discussing the broad impact of mobile, the sceptics outnumbered the believers 10 to 1. Today, if you don't believe in the power or impact of mobile you're most likely a luddite. Incidentally, it even took Finextra 4 years before "Mobile Banking" was an available category for tagging blog posts.

But here's the thing - the economics, fundamental service structure, customer experience requirements and core customer expectations in retail banking have flipped almost entirely in just 5 years - and almost no one, not even top industry analysts who watch this space every day, saw it coming.

Think about that. This rate and magnitude of change has NEVER happened in the banking industry ever before, not even close. So it is understandable that when presented with this new paradigm, that many dismissed it as unimportant for the mature, deeply regulated, incumbent-controlled industry we know as financial services.

What comes next?

While the emergence of person-to-person payments via the phone, instant balances on the handset, remote cheque (or check) deposit capture, even real-time receipts and feedback off of an NFC powered App are sexy, this is very early in the day for Mobile - we ain't seen nothing yet.

The marriage of big data (curated to rich data), personalization, geo-fencing, wearable computing and other such iterations on mobility mean that the shift in day-to-day banking engagement, payments context and customer fullfilment when and where I need it - is just beginning. 

The problem is that the organization charts of retail FIs are not built in anyway to respond to this shift. It's why what we've seen today is little more than trying to fit internet banking on to a smaller screen, or shove a debit card into a mobile wallet. This is not mobility as we're going to see it develop over the next 5-7 years. 

For a start, mobile won't look like the banking we know and love today based around branch engagement or the wet signature card of a typical onboarding process. Mobility will drive the contextualization of banking such that the promise of a bank in it's ability to solve your financial problem or enable your life will be entirely different based on where you are, what you're doing and what you need to help you get something done. 

This distributed form of banking will largely relegate the branch to a quirky form of support structure for roaming customers performing banking everyday in their life. The ability to integrate these experiences into a customer's life will be the only differentiation that matters in the next decade.

I know some are probably reading this right now with the same practiced skepticism - really, we've heard it all before, right...?

My guess is that those skeptics are the same ones that felt the same Charles Golvin or Matthew Lynn did when iPhone and the app store first appeared - "it's not fundamentally going to change our business".

They've been wrong before, they'll be wrong this time too...

5 Years that have completely changed our industry

Comments: (5)

Matt White
Matt White - Finextra - Toronto 15 July, 2013, 15:00Be the first to give this comment the thumbs up 0 likes

Pulling out old quotes is a bit mean, Brett. We all say silly things sometimes. Remember this gem from 2011: "Banks beware - if by July this year you are still issuing plastic cards, or still opening checking accounts - you are about to be in a world of hurt!"

Imagine my surprise upon seeing this tweet last week. 

Brett King
Brett King - Moven - New York 15 July, 2013, 15:19Be the first to give this comment the thumbs up 0 likes


Nice try...

Nothing has changed except that Moven has given plastic as an option for early beta customers (as previously reported in Finextra this is not something we wanted to do by choice) and we still lead with mobile and contactless. If you've seen our packaging for clients you'll see we are still totally mobile focused. Nothing new here for Moven or our customers. Certainly no change in our game plan or our vision.

I think you'll find since 09' I've been absolutely consistent on mobile's role in shifting consumer behavior and have never backpeddled on that. I also think my record on predicting the magnitude of change has been pretty consistently strong (e.g 2009-11 branch view versus more recent trending data showing actual shift).


A Finextra member
A Finextra member 16 July, 2013, 08:29Be the first to give this comment the thumbs up 0 likes

Brett, how easy do you think it will be for the large banks to manipulate their systems to respond to this innovation?


Secondly, what do you see as the big constraints and barriers to entry or growth for smaller innovators? (Regulatory requirements? Capital requirements? Compliance and risk constraints?)

A Finextra member
A Finextra member 16 July, 2013, 10:43Be the first to give this comment the thumbs up 0 likes

Nice article.

Yet again Santayana's assertion "Those who cannot remember the past are condemned to repeat it" is validated. Do we humans have a blind spot when it comes to technology that we repeatedly, despite all evidence, say that new technologies will never replace the old?

To paraphrase the article's title, "We're witnessing the fastest ever shift in everything"

Daniel Smith
Daniel Smith - Raisin Technology Europe and USA - New York & Madrid 16 July, 2013, 12:01Be the first to give this comment the thumbs up 0 likes


Don’t get me wrong - I think what you guys are doing at Moven is great – but I do feel there is a lot of noise in general about multi-channel delivery, mobile, and some very nice, value added features such as Safe to Spend, blended with some innovative PFM type services etc. that are all clearly significant improvements over traditional offerings.

However, the key focus of most activity is restricted to what could be considered relatively traditional “transactional services”, and little in the area of true product offering innovation, and as you call it - "solving your financial problem". That can't really be done if we continue to insist on a one size fits all approach.

I guess that most of this is driven by the fact that nobody to date has actually taken a green field or virgin bank and built a new bank from the ground up with this capability, and instead what I see is that most if not all of the innovators out there like Moven are having to piggy back off traditional banks with traditional core systems and traditional product restrictions.

Even banks running on “newer” core systems that purport to have a “product factory” capability are really not there, as their supposed product factory is a misnomer to say the least. It does not allow new products to be built on the fly – at all. Instead these factory capabilities only allow banks to adjust the characteristics of pre-built and pre-defined baseline products. They can create new offerings – not new products.

This is something we have detected a while back and the reason we decided to break away from the traditional product catalogue approach of existing core systems and modules, and instead allow for a true product builder that does not require multi-million dollar investments and time to provide customers with new offerings, and in fact does not require new coding at all for new product ideas.

The idea is that by then marrying this same capability to a compelling user experience with choices, we can ensure that consumers are able to fully interact with offerings, obtain a greater degree of understanding of the solution being offered – which in turn translates into a much higher degree of confidence and trust… more sales… and better sales.

This will then finally resolve the problem reported recently where it was identified that a higher percentage of Gen Y consumers go to branches to open accounts, because the current user experience doesn’t allow them to feel comfortable or to feel they truly understand what is being offered.

It will also allow us all to get away from the pure rate shopping experience that continues to exist, no matter how great a service you offer.

Brett King

Brett King

CEO & Founder


Member since

14 Apr 2010


New York

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This post is from a series of posts in the group:

Innovation in Financial Services

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

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