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.
If you’ve been chatting with your web development team recently, you might recall them talking about responsive design. But, what is responsive design and why should eBusiness professionals be taking it seriously?
First, responsive design is not a technology, it’s a development philosophy - an approach to web development that forces user experience developers to design and optimize from the outset for multiple touchpoints including (but not limited to) the desktop, tablets and mobiles. Until now, many eBusiness teams have either developed their mobile site by coding a separate set of templates, or outsourcing to a 3rd party vendor or agency whom in many cases scrapes or proxies existing content from the desktop site. As many retailers and other eBusiness teams start to develop optimized tablet sites, there is a distinct concern that supporting 3 different sites for desktop, tablets and mobile is becoming increasingly expensive and is causing a drag on innovation momentum.
With a responsive site, developers use a single set of front-end code to build a site that responds within the constraints of the device to deliver an experience that is contextual to the size and orientation of the screen. Responsive design allows eBusiness leaders to consolidate their teams (UX designers and developers) back into a single ‘web’ team aligned around a single technology (CSS3 & HTML5) and writing a single set of code. Some eBusiness leaders are referring to this consolidation as back to “one-web” and are increasingly intrigued by the potential cost and efficiency benefits that moving to a responsive site has to offer.
It’s the latest craze sweeping the nation… No, I’m not talking about Fruit Ninja, I’m talking about gamification.
There's a reason "gamification" is the buzzword on the tip of so many tongues these days. It takes ideas and structures from games - the video kind and other types - to guide companies in their quest to affect consumer behavior. So should digital strategists at banks and financial institutions use gamification to meet their business objectives?
We’ll get to that, but for now let's start by clarifying what we're talking about. Forrester defines gamification as:
The insertion of game dynamics and mechanics into non-game activities to drive a desired behavior.
These mechanics come in many shapes & sizes – SCVNGR, a mobile game developer, has a list of more than 40 – but here’s a quick list of four major ones:
· Points. The most basic element of gamification, points is any type of virtual currency – or, in a few cases, IRL currency. Digital strategists at banks & credit card companies have used this tool for years in the form of rewards points.
In July 2012, app stores — first popularized by Apple — will be four years old. There is still a lot of room to improve the discoverability and sharing of apps. For example, locally relevant content and monetization options are often missing. Adding social discovery, personalization, and recommendation features are key to improving the user experience.
However, app stores have already had a dramatic impact on the distribution of games and are starting to offer new forms of engagement between brands and consumers. Consumer usage of the most popular mobile apps has exploded in the past two years. A third of European online consumers ages 18+ who own a smartphone are using apps daily or more frequently. Seventeen percent are using apps several times a day. Stickiness and frequency of usage vary tremendously from one app category to the other. Among European online consumers ages 18+ with installed apps on their smartphones, 57% use social networking and 48% use news apps at least daily, while 69% use finance and banking apps at least weekly.
First-generation apps — aside from gaming apps — rarely made the most of the unique attributes of the mobile platform and were rarely integrated with back-end systems. We believe the market is poised for a second wave of consumer apps that are more personalized and contextual. Here’s what to expect:
■ “Big data” will enable more contextual experiences on mobile apps.
■ We'll see smarter, connected apps.
■ There will be a shift from native to hybrid and web apps.
Websites are the most widely used touchpoint for credit cardholders interacting with their providers. The quality of a credit card company's secure website impacts the relationship that firm has with its customers. To understand the state of card issuers' digital services, Forrester has just released our 2012 US Credit Card Secure Website Rankings. We found that:
Discover leads the pack with exceptional service features and valuable transactional functionality. With a score of 80 out of 100, Discover received the highest overall score among the six credit card issuers whose websites we evaluated. The firm earned a whopping 91 in our online servicing category, as well as an impressive 84 in our transactional content and functionality category.
eBusiness teams at card issuers have room to improve in cross-selling and usability. Although the websites we looked at revealed strong digital services among credit card issuers overall, our benchmark also uncovered opportunities for improvement, specifically in the areas of user experience design and secure website cross-selling. eBusiness teams need to enhance their websites’ navigation, task flow efficiency, and location cues while improving the contextual cross-selling & upselling on the secure site.
Technology is radically changing the way bank customers interact with their providers, and mobile touchpoints are at the forefront of this change. In the past five years, mobile banking adoption in the US has more than quadrupled, hitting 17% by the end of 2011. This represents a compound annual growth rate (CAGR) of more than 33%.
As such, eBusiness professionals and mobile strategists at banks are in a white-knuckle contest to out-do each other in the mobile space. To evaluate and gauge banks’ mobile offerings, we applied Forrester’s Mobile Banking Functionality Benchmark to the four largest retail banks in the US.
What we found:
Big US banks offer solid, not-yet-splendid, mobile services. We employ 63 individual criteria in our Mobile Banking Functionality Benchmark methodology. The combination of weightings and scores for the criteria generates an overall score based on a 100-point scale. In our inaugural ranking, the four largest US banks posted an average score of 63 out of 100 – above our minimum standards but far from perfect.
To gauge how far organizations have come with their mobile initiatives, Forrester conducted the Q4 2011 Global Mobile Maturity Online Survey among executives in charge of their companies’ mobile strategies.
Since 2010, fewer companies report not having a mobile strategy in place. Between Q3 2010 and Q4 2011, the percentage of companies we interviewed that have no mobile strategy or are at the early stage of defining one has significantly decreased, from 57% to 31%. C-level executives are increasingly in the driver’s seat, and mobile is moving away from a test-and-learn approach to fueling companies’ corporate goals. Mobile is primarily viewed as a way to improve customer engagement and satisfaction.
However, the majority of companies face organizational issues and struggle to allocate the right resources for mobile and to measure the success of their mobile consumer initiatives. The main obstacles they face are these:
■ Lack of measurable business goals clouds early success.
■ Limited investment, resources, and expertise slow progress.
■ Cross-functional and cross-geographical complexity cause inefficiency.
There are plenty of new disruptive platforms emerging from tablets, from game consoles to connected TVs, but mobile will be the primary platform for global product innovation. Only mobile phones can offer such a global reach.
To prepare for the accelerating pace of mobile disruption, product strategists should help other internal stakeholders rethink the life cycles of their mobile applications and services and drive innovation via smarter apps, richer data, and converging technologies.
On April 2nd I'm attending the TEDx event in Maastricht, the Netherlands, which is dedicated to healthcare. Given my market insights background, this may sound a bit out of my league. But you're mistaken. Of course, the healthcare element is sometimes a bit alien to me, but healthcare is not just about curing disease — it's also about culture, technology, and consumer behavior. And those elements are very familiar to me as market researcher.
Last year the event got me very energized. It's great to see how technology can help people in very difficult situations. I listened to e-patient Dave, a cancer patient who talked about how he used patient support communities like epatients.net to better understand his illness; he has since become a noted activist for healthcare transformation through participatory medicine and personal health data rights. And Lucien Engelen advocated crowdsourcing to create a map of defibrillators (AED devices) globally. (Note: you can download the app here.)
We know that consumers are ready for healthcare-related activities on their mobile phones. Forrester’s Technographics® data shows that a third of smartphone owners use their phone for healthcare-related activities, ranging from tracking what they eat to medication text alerts.
Hotcakes, you've got some competition: the phrase "selling like tablets" might soon enter the global lexicon. And it's not all hype — though there is a fair bit of that as well. Tablet users in the US are estimated to grow at a compound annual growth rate (CAGR) of 51% from 2010 to 2015. That’s a fast-growing market for firms of all stripes.
As such, the tablet as a touchpoint is becoming a critical consideration for eBusiness & Channel strategists. This is especially true for executives at banks, as financial transactions benefit from the immediacy of the mobile channel, but users often struggle to make these transactions on smaller smartphone screens.
In my new report, I outline the process Citibank went through in building its own tablet banking strategy, developing an iPad app, rolling it out to customers, and continually improving the service. We outline how Citi:
Without naming names, I’m struck by the sharply different perspectives these executives have. Simplistically, their view of mobile banking falls into two camps:
Mobile is just another channel. These executives see mobile banking as a way of letting customers do old things, like checking their account balance, in new ways.
Mobile will revolutionize retail banking. These executives believe that mobility could turn the retail banking industry upside down, by enabling customers to do entirely new things like scanning bills to make payments, responding to location-based offers, and receiving rewards at the point of sale.