Earlier this week I caught up with Discover’s Mike Boush to talk about his keynote at the upcoming eBusiness Forum, where he’ll explore innovations in eBusiness at Discover. Here’s a snippet of our conversation, and a sneak peak of Mike’s session at the event:
Q: What digital initiative have you undertaken in the last 12 months that you're most excited about?
A: I love what we're doing with partnerships online. It's creating a whole lot of value for customers and, frankly, getting us out of the "must be built at Discover" mentality. It started with an integration with PayPal in order to deliver peer-to-peer payment services. The program leverages PayPal’s huge delivery platform, and customers love it. Then we introduced an integration with Amazon that lets customers pay for their Amazon.com purchases with the cash they earned through our Cashback Bonus rewards program. This really highlights the difference between competitors' "points" programs and our straightforward cash, and the transparency shows just how great our program is. And recently, Google announced our integration of Discover card enrollment into the Google Wallet from our website, which is convenient for customers and helps position us in the mobile payments space. These integrations are just a sample of what we've done, but they become powerful illustration of what we can do when we team up and innovate with other great companies.
Q: What gets in the way of delivering the right experience to your customers?
This is a guest post from Myriam Da Costa, a researcher serving eBusiness & Channel Strategy professionals.
France has been quick to embrace mobile banking. Banks like BNP Paribas and Société Générale were among the pioneers of mobile banking in Europe and since 2009, all of the big French banks have launched iPhone mobile banking apps, so most French banks now offer several forms of mobile banking. The first wave of mobile banking was about getting the basics down and offering customers functionality like balances, transaction histories and SMS alerts. The second wave now focuses on money transfers and payments.
As we wrote in our report on The State Of Mobile Banking In Europe 2012, mobile banking is the foundation for mobile payments. France's banks and mobile operators are moving fast to seize the opportunity. In the past two years there has been a wave of new mobile payment initiatives in France: Buyster, Cityzi, Kwixo, Kix and S-money.
In our research on eBusiness and channel strategy, we often come across clusters of innovation where innovation by one company in a sector causes its competitors not only to match it, but to try to leapfrog it -- resulting in a rapid cycles of innovation. Among the examples of these clusters are insurance companies in the US (Progressive, Geico and a growing number of others) and banks in Spain (Bankinter, La Caixa, BBVA and Banco Sabadell).
Another of those clusters is the retail banking market in Turkey. Last week I was in Istanbul and was able to see some of the innovations in person and meet a number of heads of eBusiness at Turkey's big banks. Turkey's banks have been quick to adopt digital technologies and achieved some world firsts for the banking industry. Here are a few examples you might like:
Ziraat Bank has deployed a network of unstaffed video kiosks (see picture, right), which it calls video teller machines, that use video-conferencing to connect customers with agents in the bank’s contact centre. Customers can use the kiosks to deposit and withdraw money, buy and sell foreign exchange, pay bills, transfer money and buy bonds. The kiosks let the bank expand its network much more quickly than building conventional branches would do.
Everyone is talking about it, everyone is doing it, and everyone wants one. Social, mobile, and tablets are creating digital banking disruption and fundamentally shaking up how banks interact with and serve their customers. The rise of the digital channels has given banks a unique opportunity to drive lower-complexity, everyday tasks to digital channels while beginning to refocus live channels to provide guidance and support for more complex, relationship-building activities. Disruption brings opportunity both for you and for the disruptors, who are faster, stronger, and sometimes even better at giving customers what they really want, more conveniently than before. Disruptors are setting the pace for customer adoption of more complex digital financial services. So the question is, how do you turn digital disruption into opportunity and fundamentally rethink how social, mobile, and tablets can transform your consumer banking experience?
On October 25, at the Forrester eBusiness & Channel Strategy Forum in Chicago, I will be exploring how social, mobile, and tablets are empowering eBusiness professionals to revolutionize the retail banking environment. In this session, I will discuss how:
Few financial services companies have fully explored social media. A comparative scan of social media marketing efforts shows that few financial services firms are using social media marketing effectively compared with other industries. Financial services firms haven't been blind to their customers' adoption of social tools, but it's clear that the industry hasn't fully embraced social technologies either.
Back in November 2006, a startup called Wesabe first showed the potential of online money management. Packaged personal financial management (PFM) software for PCs like Intuit's Quicken had existed for years, but Wesabe, Mint.com and a handful of other startups showed the value of using customer data, and community, to help people understand their finances better.
Since then, hundreds of banks, credit unions, wealth management firms, and other companies have launched a range of spending categorization, budgeting, peer group comparisons, and other money management features for their customers.* The leaders are increasingly making money management available in mobile and tablet apps, as well as on their websites. Fuelled by the poor state of many of the world's developed economies and growing use of digital channels, customer interest in online money management is substantial, as my colleague Reineke Reitsma wrote on her blog a few months ago.
Yet despite the growing number of firms that already offer money management, and the evident interest of some customers, many financial services eBusiness executives still question whether the business case adds up. Our new report on The Business Case For Personal Financial Management addresses that question. Here's what we found:
Some leading banks have already seen the number of mobile interactions overtake the number of online interactions. The evolution of mobile devices coupled with rising smartphone and mobile banking adoption is evolving banking customers’ needs and will fundamentally change the way eBusiness professionals need to view technology and customer support. We expect mobile banking to grow rapidly over the next few years, but digital banking teams will have to overcome many challenges to stay on par with Forrester’s projected growth, or risk being left behind. In our recent report The State Of Mobile Banking 2012, we help eBusiness and channel strategy professionals understand the most important trends in mobile banking, including:
Mobile banking will soon be mainstream. Fueled by the adoption of smartphones and the growing supply of mobile banking, the use of mobile banking has grown steadily over the past few years. We expect the number of US mobile banking users to double in the next five years and reach 108 million by 2017 -- 46% of US bank account holders.
Everyday banking relationships are moving to mobile. Consumers are progressing from simply checking their account balances or locating an ATM to making bill payments or transferring money to other accounts on their mobile phones. As that happens, mobile banking is displacing use of other channels like branches and online banking.
In my coverage as Forrester’s new payments analyst, I'll serve consumer product strategists who accept or facilitate payments as they create, navigate, and capitalize on digital disruption within payments.
We are in the early stages of unprecedented innovation and transformation of the consumer payments industry, and emergence of a digital wallet marketplace is the next act. The definition of a digital wallet continues to evolve as innovations come to market, and the term is sometimes used synonymously with “mobile payment.” However, there are significant differences. Forrester defines a digital wallet as:
A digital service — accessed via the web or a mobile application — that authorizes payment transactions from one or more payment sources and facilitates other commerce-related features, such as offers, coupons, loyalty rewards, electronic receipts, and product information.
As new wallets are introduced into the market, we will see consumers and merchants accelerate their trial and adoption. Yesterday, Google announced a new cloud-based version of their digital wallet that intends to address many of impediments associated with their first version. In my new report out today, titled “Why The Digital Wallet Wars Matter," I frame the emerging digital wallet landscape, provide a profile of early adopters and how to capture their attention, and outline which wallets will ultimately win in the marketplace. Here are the key takeaways:
The longer we spend researching mobile banking, the more convinced I become that mobile banking is the most important innovation, or cluster of innovations, in retail banking in years, arguably in a century. Here’s why I think mobile banking is a much bigger deal than cash machines (ATMs), credit cards or home-based online banking:
In developing economies that lack a dense infrastructure of branches, ATMs and fixed-line telecoms, mobile banking and payments are bringing millions of people into the formal banking system for the first time.
In developed economies mobile banking will become the primary way many, perhaps most, customers interact with their banks. Banks need mobile banking to provide a platform for mobile payments and to protect their retail payments businesses from digital disruption as mobile payments start to replace card payments in shops.
Mobile banking is on a steep rise in the US. Almost one-third of online bankers currently conduct banking activities through their mobile handsets, and this population is poised to more than double by 2017. As indicated in our recently published Forrester Research Mobile Banking Forecast, 2012 to 2017 (US), younger age groups (Gen Y and Z) and familiarity with PC banking are fueling thisrapid adoption.
While checking account balances is the most popular activity, receiving alerts is the fastest growing feature; users will triple in the next five years. And with growing consumer comfort, mobile transactions, such as transferring funds from one account to another, will more than double during the same time period.