There Won’t Be A Mobile Channel In Banking Anymore

The mobile channel is increasingly relevant in business strategies, application architectures and applications of financial services firms. Consequently, we are all aware that the headline represents a strong exaggeration. So, why this statement? Is there any substance in it that application architects, application developers, and enterprise architects need to consider? Interactions with a number of banks indicate that the answer is yes. I have recently talked to a number of executives on the IT and business side of banks about Forrester’s research on banking and banking architecture of the future – often with the report Financial Services Of The Future: Collaborative Competition Will Be The Norm (one of a series of reports) being the anchor point. One of my key questions to the banking executives: “How do you use channels today and how do you plan to use them in the future?”

One of these executives is Alex Twigg, the then Head of Delivery & Operations UBank (he got promoted a few days ago). A division of National Australia Bank, Ubank ( is an Internet only bank. It started in November 2008 with a single product, term-deposits, but soon added a savings product and is working on additional products. Today, UBank has already become one of the most successful deposits institutions in Australia. In addition to a competitive cost structure and offering customers online account opening, UBank also offers customers unique ways to interact with the bank including:

The bottom line:UBank continued success depends upon channel innovations.

Conspicuously absent from UBank’s channel interaction is mobile. When I asked Alex about this, he told me that UBank may come up with a mobile banking solution in the future, but for now, he has a significant question mark over investing heavily in the mobile channel. This statement surprised me given the innovative culture at UBank and the fact that there are already mobile-only banks, for example Jibun Bank in Japan. Alex explained his reasoning. He believes that rapid device evolution and bandwidth availability will quickly eliminate the need for device specific platforms resulting in the convergence of the mobile and internet channels, so the mobile channel can be used as if it were just a flavor of the Internet channel on top of different network layers. Therefore, his focus is on the challenges to deliver new products and solutions – not on a single channel (the mobile channel) which is good for a variety of apps for different classes of smart phones including the iPhone as well as other mobile approaches such as phone browsers on top of UMTS and even WAP (yes, WAP is still out there).

Channel Innovation Requires A Channel Agnostic Architecture

The core of Alex’ statement is that banks need seamless delivery of products and services across a variety of channels. The business should not be put in a situation to care about the technology capabilities or deficiencies of a given channel when deciding on product/channel alignment. Multichannel applications and architecture today need to take care of the different behavior of channels to provide a basis for the full emergence of ubiquitous banking (Intelligent Devices Will Drive Ubiquitous Banking). Bank executives involved in application development and delivery as well as architecture need to ensure that their applications don’t support any individual channel, but consist of a layered approach isolating channels and business functionality. App dev and delivery staff needs to:

  • Focus on either building functionality or delivering functionality over the channels within the framework of a defined multichannel framework or solution – but not at both at the same time. 
  • Build or select the multichannel architecture in a way that channel-specific aspects are located in a clearly defined and cohesive layer of the architecture.

With this approach, a bank’s business decisions will become independent from channels that may or may not be used for a given product or service: The mobile channel won’t exist anymore. As soon as we will see more convergence of channel technology, the need for this kind of multichannel approach will become smaller and smaller.


Channel Agnosticism

I absolutely agree that we need to enable channel indifferent capability through a specific layer in the architecture. In keeping with the theme of a recent Forrester conference, EA is also about the business. Where the business should be able to remain unconcerned with technology limitations to a degree, they absolutely need to think about how those real limitations affect how our customers use one channel vs. another. In the case of mobile banking, we have looked for a while at enabling our web banking on smart phones but are finding that the customers who would tend to use their phones for banking access are less interested in a full featured capability and more interested in being able to quickly access balance information or to transfer funds. This is more in keeping with an IVR model than a web model. Your point is well made that the capability on the mobile devices will very likely improve over time, but I'm not so sure that the customer's use will evolve as quickly.

re: There Won’t Be A Mobile Channel In Banking Anymore

The very last paragraph is a little convoluted, but let me see if I understand:

You should architect your products in a way to isolate the presentation layer from functionality so that you can be more flexible in the channels that you support to deliver your product/services. Is that right?

But that seems a long way from saying that the "mobile channel won’t exist anymore" as you state, which to me reads that mobile as a channel won't exist.

re: There Won’t Be A Mobile Channel In Banking Anymore

Hi Glenn,
You rightly stated this is about "isolation". If a given application architecture has reached a sufficient amount of isolation, then the mobile channel wouldn’t exist (as in they don’t need to care about this channel as much as before) for those app dev and delivery teams for working on for example business services. The business side of a bank would also need to care much less than today about the various combinations of products, services and channel. For those app dev and delivery teams focusing on channels, it will be a longer way – I entirely agree. In the meantime, banks may decide that the mobile channel is currently not space they want to focus on – similar to UBank.