Monday, February 18, 2013

Mobile Banking and ING

Over the past few months I have been sharing my research on mobile banking here on this blog.  Last week I wrote an article titled, Mobile Banking and Change is Coming about the transformation happening in the banking industry - first propelled by the internet and now by mobile apps.  In 1994, Bill Gates said, "We need banking, but we don't need banks."  The truth in this statement, given 19 years ago, is being proven in 2013.

There was an article in yesterday's edition of the The Wall Street Journal (WSJ) titled, Web Turn Leads to ING Cuts.  Here is an excerpt, "Dutch bank ING Groep NV plans to cut another 2,400 jobs (for a total of 5,100 jobs cut by 2015) at its retail banking operations, its biggest source of revenue, as its customers do more business online.  By online they mean in large part - mobile.

Why these additional cuts?  Here is what ING said, "Retail customers in the Netherlands have embraced new technologies for their banking needs at a faster rate than expected, reducing the need for traditional bank branches."

Here are some numbers on ING retail banking as reported by the WSJ:
  • 84% of retail customer transactions were made online in 2012, up from 57% in 2008.
  • Traffic to mobile apps increased to 25 million visits per month in 2012, triple the 9 million in 2011.
  • 60% of savings-and-loan product sales were made through the Internet.
Can we replace the words "bank" and "banking" in Bill Gates' 1994 prediction with other words?  Can we say:
  • We need the written word, but we don't need paper books or magazines.
  • We need healthcare records, but we don't need paper files.
  • We need music, but we don't need CDs or DVDs.
  • We want more photos than ever, but not film and processing.
  • We need insurance, but we don't need brokers.
  • We need good marketing, but we don't need the yellow pages.
  • We need an encyclopedia of knowledge, but not in a large set of printed books. 
  • Etc.
We need to abstract our need, from the delivery or fulfillment of the need.  This abstraction, unrecognized, will cause businesses to fail.  This is what business transformation is all about.  Mobile banking delivers banking where users want it, conveniently on their mobile device.

Kevin Benedict, Head Analyst for SMAC, Cognizant
Read The Future of Work
Follow me on Twitter @krbenedict
Join the Linkedin Group Strategic Enterprise Mobility
Full Disclosure: These are my personal opinions. No company is silly enough to claim them. I am a mobility and SMAC analyst, consultant and writer. I work with and have worked with many of the companies mentioned in my articles.