Banking Software: Digital strategy and reality checks

Just few weeks after BBVA acquired Simple Bank for EUR 100 Million; one of the biggest players in the Software Banking Industry, Misys went into the digital fight and took over, for an undisclosed amount, the German company IND group. Founded in 1997, IND group provides with software specialized in Digital experience to more than 30 clients around the world, including Alior, Erste Bank, and the prestigious Swiss Bank UBS, which in the past months just launched its Mobile banking service with a big publicity campaign in TV and Newspapers.

Established banking software editors have started to recognize that Digital Experience is more than just a topic in the conversations with Bank Executives and that making a mobile version of their traditional front end applications will not be enough.  For many incumbents, however, the most unsettling feeling regarding this trend is that apparently the next big APP bestseller is not coming from any known competitor or from the Googles, Twitter or Amazons, but from garages and strip-mall offices filled with 20-somethings developing pinpoint mobile apps that customers are using to chip away at the traditional financial service model. IND Group had its main offices in Munich, but most of the work was developed by virtual teams in Hungary and other East European Countries.

This trend is also fueled by the extremely dynamic behavior of the average smartphone user, which currently has installed the brave number of 28 APPs in more than 1 billion smartphones around the world.  According to the website “Our Mobile planet” the major conspicuous users of APPs would be in South Korea with up to 40 Apps installed and having paid for three of them. The next APPs hungriest country would be Switzerland, just behind with 39 Apps installed and having paid for almost 10 of them. The market for paid application downloads is already beyond the mark of 18 billion in 2013 in the top five app platforms.

In this context, banking Customers are expecting not only the same “one-click” buy experience as they know from Amazon, but also they expect to complete a money transfer and being able to share the screenshot with the person, whom he or she just sent the money over.  Having a 3-days SEPA average waiting time for a money transfer, of course, kills the APP experience.

To be continued