In a recent Global Banking & Finance article, we discussed the mobile revolution in financial services and the need to be strategic and plan for the future. Banking is becoming increasingly digital, with mobile at the heart of the experience. According to Forrester, “mobile banking is the most important strategic change in retail banking in more than a decade.” It is predicted in less than five years the number of subscribers using their device for banking purposes will double to over 1.75 billion.
According to the annual State of Banking Innovation 2016 survey, mobile banking is the most valuable area of consumer innovation, and it is in this area that banks are spending the most money. Standing still, or waiting to see what direction the market turns with mobile payments, is no longer an option.
The Strategy Behind Speed and Agility
Financial service providers need to deliver attractive and highly functional customer journeys for increasingly digitally-savvy customers. Many banks have launched a mobile payment service or wallet, but new entrants are investing heavily in mobile payments, and banks need to keep up with the fast evolving landscape.
Don’t Fear the Cloud, Embrace It
A 2014 survey of CIOs from financial services firms saw that 72% of respondents feared the cloud because of concerns over data not being backed up, and issues of disaster recovery. However, the cloud has made significant improvement in the areas of security. Cloud based technologies can deliver software at high speed, and enable financial institutions to bring greater flexibility, transparency and control over how they manage their data, run their business and deploy their IT operations.
Creating Entirely New Markets
Banks have a unique opportunity to create a model that enables mobile banking to reach a new unbanked market, on both a consumer and business perspective. Some 68 million Americans (22% of the country’s population) and 25 million Europeans are unbanked. With income levels growing, access to finance is now very much on the agenda for many public and private financial institutions. The time is right for banks to take advantage of this growth area by transforming their current operating strategy and service offerings, and effectively reach this fast-growing market.
Don’t Stand Still on Security and Risk Management
As you become more innovative and strategic, unfortunately, thieves and hackers do too. With new technological advances, it is imperative to employ the newest and best security capabilities, so that you can to react swiftly to any breaches or suspicious activity. Collaboration tools are essential for the bottom-up strategic risk management, and keeping the maintenance of risk simple.
Diving deeper into mobile is undoubtedly a strategic necessity for the financial industry. Led by the sharp increase in mobile subscribers globally, and the high volume of smartphone sales, mobile payments are expected to exceed $721.4 billion (£435.2 billion) by 2017. While gaining a share of this billion-dollar opportunity is highly attractive, banks and other financial institutions that are unwilling or unable to realign their strategy and quickly adapt their IT infrastructure, risk losing out to their digital upstart competition. Amidst this avalanche of change, traditional banks and financial service organizations that embrace it have the opportunity to redefine themselves in an entirely new economy.