It is safe to say that online and mobile banking have hit mainstream. Today, more than half of all adults with a bank account in France, Germany, Italy, Netherlands, Spain, Sweden, and the UK use banking services — which we define as information requests, transactions, or alert delivery — on their PCs, tablets, or mobile phones. The uptake of tablets and smartphones gives banks an opportunity to engage their customers deeply across platforms. Our recently published Forrester Research Digital Banking Forecast, 2013 To 2018 (EU-7) explores how each Internet-connected device will drive future online and mobile banking adoption across seven key European markets.
The forecast identifies some key trends in the European digital banking market.
1. Mobile banking adoption continues its sturdy growth. As recently as 2009, mobile banking activity was negligible, representing fewer than 5% of all adults with accounts. Adoption has risen nearly fourfold since and will continue to grow at double-digit compound annual growth rates through 2018. However, consumer concerns about device security will restrain growth: In all the European countries we track other than Italy and Spain, consumers are more than twice as likely to cite security concerns as a reason for not using mobile banking than for not using PC/tablet online banking.
I’ve spent the past two days at Finovate Europe in London, which must be one of the more thought-provoking ways anyone in digital financial services can spend two days.
Here’s my perspective on the lessons from the event for digital financial services executives:
More people are focusing on the small business opportunity. There were far more companies proposing to help small businesses manage their finances this year, in numerous ways from access to capital through to document storage and expense management. I was particularly impressed by the work that Efigence and Idea Bank have done to help Idea Bank’s small business customers manage their finances.
Automated financial advice for mainstream customers is edging closer. For years, Forrester has talked to its clients about the huge opportunity, and pressing need, for financial firms to use software to automate the production of financial advice. A growing number of firms are trying to solve this problem from one angle or another, including Money On Toast, Vaamo, Your Wealth and Yseop. Perhaps the best quotation of the event came from Elizabeth Farabee at Yseop: “A banker doesn’t sell the customer the best product, but the product he knows best.” Automating the manufacture of advice can fix that.
January is a time of lists. For some, it’s their 2014 resolutions. For me, it’s my post-Christmas to-do list. Inevitably, there will be quite a few thank-you letters to write (even for those unwanted presents that feed the January eCommerce activity). I will also be making my way to the bank to cash the checks I’ve received from the more removed (and dare I say older) relatives. And I won’t be alone: 23 million checks were sent as gifts in the United Kingdom in 2012. This unwanted yet unavoidable annual visit to the branch means that whilst checks might be a less risky present, they are not hassle-free. But hopefully not for much longer. In 2014, the UK government will finally consult on introducing legislation to speed up check payments, including through smartphone-enabled remote deposit capture. And about time.
In the US, bank customers have been using services like USAA’s Deposit@Home since December 2006. Remote deposit capture was initially only possible through a high-resolution scanner. Innovations in mobile technology have made remote deposits easier and more popular. By 2012, 13% of US online adults who have done mobile banking activities in the past three months reported depositing a check by taking a picture with their mobile device.
This is a guest post from Rachel Roizen, a researcher serving eBusiness & Channel Strategy professionals.
Gamification, which Forrester defines as the insertion of game dynamics and mechanics into non-game activities to drive a desired behavior, has rightfully been a hot topic of debate in many roles and many industries. We’ve blogged about it here, and written reports on success stories ranging from Club Psych on the USA Network to the use of games in education.
The banking industry has been using some features of gaming for years, such as by offering redeemable points based on credit card purchases, but some remain wary of combining games with finances. Forrester’s view is that game mechanics can be used to draw in new and existing digitally connected customers. Digital teams at financial firms that have begun experimenting with gamification are seeing positive results, including increases to online engagement, online banking use, product sales, and social influence. Here are four leading firms that are betting on gamification and implementing it in innovative ways:
When my teenage son is interested in purchasing a mobile phone, some PC equipment, or a games console, he will typically spend weeks gathering the necessary information to arrive at a well-informed decision. He once told me that he feels this is necessary to make the best use of his savings — a trait that I do not always observe banks around the world exhibiting.
Recently I had a phone call with a few people from the business side of a medium-size bank somewhere in the world. Their challenge? They wanted to use the best method to find the mobile banking application most suited to their bank. Their real challenge? They had no time to make a deeper assessment of their individual business and technology situation and only wanted to get proof that their approach would be the right one. They wanted a clear recommendation within a few days.
Unfortunately, it’s not that easy. When I know nothing about a bank’s business environment, its supporting application landscape, and its underlying technology, I am very reluctant to offer more than a long list of business applications, regardless of whether the topic at hand is mobile or cross-channel solutions, core banking, or something else. This is in line with a research report about best practices for banking platform transformation that Forrester published some time ago. At the time, we identified a few key reasons common to major banking platform transformation failures. One of those reasons: ill-designed shortcuts.
[note: this was written live last week while I was attending Finovate]
Greetings from the Big Apple! I’m here attending the fancy schmancy Finovate Fall 2013 conference featuring tech solutions and innovations from – and for – the financial services industry. Here are some of the offerings and presentations that stood out for me, in the order they were presented at Finovate:
Kofax offers process automation software for lenders, but the big takeaway for me was their recent expansion of mobile, cross-channel, and multichannel analytics for financial providers. Focused on how customers shop for a loan, the dashboard and data are digestible and actionable. The jury’s still out, but strong analytics and easy-to-use tools can help banks improve sales in their lending lines of business.
MoneyDesktop offers digital money management tools – also known as personal financial management or PFM – and their demo at Finovate continued to show their strengths: Nifty tools, clean design, and intuitive UI and UX. The question mark for banks, however, continues to be how well integrated – or better yet, embedded – the experience can/will be for end users.
"Let's just say I'm not lost when it comes to data . . . but I could be more found . . ." – (eBusiness team member at a top 50 US bank)
Digital teams are surrounded by data and metrics — from KPIs to customer analytics. Yet I often hear from clients who wish they were just a little more comfortable knowing what the data is really saying, or which metrics are most important.
We just published a brand new report on The Mobile Banking Metrics That Matter which outlines how mobile strategists at banks can put the right metrics in place and work with their analytics teams to get data outputs that guide them toward smart business decisions.
Writing this report got me thinking about which books, blogs, and articles I’ve found most useful when it comes to really getting data and metrics. Here are five I think might help you too:
The Tiger That Isn’t. Probably my personal favorite book about stats and measurement. Written for a mainstream audience, the book works as a guide to thinking through what a given stat or data point really means — and when to trust or doubt such data. It’s also a great read, full of interesting nuggets and statistical oddities (like how the vast majority of people have an above-average number of legs). The book’s thesis is that people who consume data should be skeptical but not cynical about statistics. From there, it helps the reader more easily contemplate and act on the data and metrics they encounter.
Mobile banking success is a moving target: Customers needs and expectations are changing rapidly, and eBusiness teams at banks are sprinting to get ahead of their customers’ expectations. To achieve this, firms are rolling out new features, optimizing existing services, and enhancing mobile experiences.
To understand which firms are leading in mobile banking — and to better gauge the mobile banking landscape overall — we used our Mobile Banking Functionality Benchmark to evaluate and rank the mobile banking efforts of 15 of the largest banks in North America, Western Europe, and Australia.
Highlights of this research include these findings:
Chase takes the top spot overall. Chase received the highest overall score among the banks we evaluated, netting a score of 71 out of 100. The bank offers mobile banking services across a range of touchpoints ranging from smartphone apps, strong mobile websites, and two-way SMS. In addition, Chase also has strong mobile money movement features such as bill pay – including the ability to add a payee – and mobile transfer capabilities.
Ten years ago, Forrester published some research with the slightly awkward title of ‘New Payment Systems’ Survival Guide’. One of our findings was that many successful new payment systems have some kind of ‘must-have’ transaction that encourages customers to go through the hassle of learning how to use a new system in the first place. Good examples of ‘must-have’ transactions include eBay’s auctions for PayPal, travel to work for Transport for London’s Oyster, and online shopping for iDeal.
Ever since, I’ve been seeking the ‘must-have’ transaction that will spark consumer adoption of mobile payments in developed economies. But what if there isn’t one? (And, after 10 years, it’s probably time to admit that there isn’t). The answer is to focus relentlessly on both lowering the barriers to mobile payment by making it as easy as possible for customers to use a new system and to increase the benefits by maximizing the number of ways and places customers can use a system.
Banks get a bad rap for not being innovative enough. But at least one provider is proving the haters wrong: Early this year, U.S. Bank launched Mobile Photo Bill Pay, a feature that lets mobile bankers add a new payee simply by taking a picture of a paper bill or statement.
This mobile feature – powered by technology solutions company Mitek – goes beyond “nifty” With it, U.S. Bank offers customers an easier, more convenient, and more elegant cross-channel experience for a common activity. It helps the bank by increasing the number of customers who use digital bill pay – and deepening relationships with customers. According to Niti Badarinath, SVP and head of mobile banking at U.S. Bank, “Getting people to become active users of bill pay is key to our digital strategy, because we recognize the value and stickiness of the relationship when people pay bills." (taken from a recent article in American Banker)
How it works
When U.S. Bank launched mobile photo bill pay, I immediately pulled up my U.S. Bank iPhone app and took this new feature for a test drive (see screenshots below). Put simply, this is an innovation that delivers: A customer can go from opening a bill he got in the mail to enrolling a brand new payee to paying that bill in under 150 seconds (a.k.a. less than 2 minutes and 30 seconds). This is without setting up any bill payment options in advance, or entering any information manually – the mobile photo bill pay feature even corrects for image distortion, reads relevant data and auto-populates all the information.