Mobile Banking, Mobile Payments and Digital Transformations

I read with interest (no pun intended) an article today titled, The Future of Mobile Payments and Banking, from Cognizant's banking and financial services expert Tony Virdi.  In the article he identifies a number of mobile and digital trends he is seeing in 2013 including:

• Changing consumers behaviors and demands are driving transformation within the banking and payment processing industries
• The volume of digital (mobile and Internet) banking transactions is growing exponentially
• The role of the bank as a physical venue or outlet has changed as most transactions are moving online or mobile
• Digital bankers [I read mobile/Internet bankers] are rapidly becoming the new power base
• Retail banks are increasingly dedicating discretionary budgets to investments in digital solutions
• Banks can increase their wallet share and income by offering more and better digital services
• Banks are increasingly focused on m-commerce as a means of both providing better customer service as well as enhancing their top lines
• Smartphones are now payment acceptance device (via Square, PayPal, etc), which reduce the time to bring on board new merchants and also reduces the cost of transaction
• Customers expect to instantly personalize banking products (via mobile apps and the Internet)
• More UK online shoppers are using debit cards than credit cards in 2013 according to the UK Cards Association.  That is a significant industry change that banks need to ponder.
• New mobile payment services will enable instant, secure payments from bank accounts via apps, bridging ecommerce, mCommerce and extending into payments made directly in a retail environment
• New UK service in 2014 to enable people to send money via smartphone to anyone holding a bank account in one of eight participating banks. Payments will be routed via their mobile number linked to their sort code and account number in a database. 
• Smartphones used as payment acceptance devices provide an entirely new platform for loyalty-based programs to be developed and implemented

For more on digital transformations in the banking industry read http://mobileenterprisestrategies.blogspot.com/2013/07/banks-mobile-technologies-and-smac-part.html.


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Kevin Benedict, Head Analyst for Social, Mobile, Analytics and Cloud (SMAC) Cognizant

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***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.

Mobility, The Internet of Things and Code Halos

Each of us are surrounded by our digital choices, preferences, activities, history and experiences that are captured as data and analyzed by the systems and websites we use.  Why did Google, a company known for its search engine, develop a mobile operating system?  They recognized the importance of mobility, and the fact that we would be accessing all things digital through these devices.  They wanted to optimize their ability to collect data and analyze it through mobile devices and the mobile web.

Here is a recent excerpt from an article written by Ben Pring on this subject, "What one key characteristic separates today’s high-flying outperformers – such as Apple, Google, Amazon, Netflix and Pandora – from fast-followers, wannabes, and laggards? It’s a precision focus on the information that surrounds people, organizations, products and processes – what we call Code Halos ™."

My colleagues Malcolm Frank, Ben Pring and Paul Roehrig recently recorded an excellent short video on this subject to help us understand the role of "Code Halos" on the web, in mobility and the Internet of Things.

Video Link: http://youtu.be/XYwiDJ7UWHo



To read more about SMAC (social, mobile, analytics and cloud) strategies and trends, Code Halos and other mega-trends click here, or visit my article library on these subjects here.

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Kevin Benedict, Head Analyst for Social, Mobile, Analytics and Cloud (SMAC) Cognizant

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Learn about mobile strategies at MobileEnterpriseStrategies.com

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.

Banks, Mobile Technologies and SMAC, Part 3

This article is Part 3 in a series on Banks, Mobile Technologies and SMAC.  Click here to read Part 1 and Part 2.

In this article my colleague Peter Abatan, a Mobile Technology Consultant and banking expert with Cognizant, shares his insights into the digital transformation happening in the banking industry.  This transformation reflects new and innovative business models, the rapid adoption of mobile apps for banking, social media and other cloud based solutions.  In this article Peter and I discuss P2P (peer-to-peer) lending services and their potential integration with Internet based and mobile banks.

P2P lending sites are part of the emerging digital transformation happening in the banking industry. Their purpose is to provide higher returns for investors/savers, while using SMAC (social, mobile, analytics and cloud) based technologies to help find lenders for people/companies that may not meet a traditional bank’s criteria for lending.  They are a in effect, match makers.  They are the match.com for people wanting to lend money for higher returns, and people or companies wanting to borrow it.

P2P lending sites can be risky, however.  There is little protection for investments.  If you invest and a borrower defaults on their loan, your money is at risk.

According to the P2P Finance Association this market sector is growing at a rate of 250% per year, but not all are successful. In December of 2011, P2P lender Quakle became insolvent and many lost their investments.

I believe the logical evolution of this market is for P2P lenders to evolve into, or integrate with Internet/mobile banks.  As an Internet/mobile bank, P2P lenders would be able to expand their products  and services into things like mortgages and insurance to compliment money lending services.

P2P lenders as Internet/mobile banks, will be in a good position to compete with traditional brick and mortar banks as they can offer better rates on savings and other investment tools, plus they will likely have a lower operational cost.   Lower operational costs are the result of not needing to maintain traditional banking processes like check processing, money handling and logistics, large numbers of employees, bank branches and physical security services.

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Kevin Benedict, Head Analyst for Social, Mobile, Analytics and Cloud (SMAC) Cognizant

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Learn about mobile strategies at MobileEnterpriseStrategies.com

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.

Banks, Mobile Technologies and SMAC, Part 2

This article is Part 2 in a three part series (read Part 1 and Part 3)

For those that missed Part 1, Peter Abatan, my colleague at Cognizant and a banking industry and mobility expert, has been sharing his thoughts on trends in the banking industry.  The following points come mostly from his email messages to me and his blog articles.  He believes Internet and mobile banks will create increasing competition for traditional banks for the following reasons:

• Checks are quickly becoming obsolete.  In fact, the UK plans to phase out checks by 2018.
• Internet and mobile only banks will not issue or process checks; instead they will offer alternatives by which you can make payments. This reduces their operation costs.
• People are carrying less cash than they did 5 ago.  That makes ATMs less important. According to the Financial Times (FT), UK consumers did nearly 10% less shopping with cash in terms of monetary value, in 2012 than in the previous year. FT goes on to say that the use of debit cards and newer methods such as PayPal are making gains compared to the use of cash. If ATMs are needed, Internet and mobile only banks can always join existing ATM networks so that members can withdraw cash.
• Internet and mobile only banks will be able to pay more attractive interest rates because they have few or no branches and fewer employees to support.  This is a significant competitive advantage.
• P2P banking (peer-to-peer), NFC (near field communications) and contactless payment adoptions are on the rise: The number of retail outlets that receive small payments through contactless technology is on the rise, at the same time P2P payments, using mobile apps like Barclays Pingit, are increasing in popularity and enabling users to transfer a limited amount of money to another person or business without going through a traditional bank.
• P2P lending may become the killer app in the banking industry. This is where Internet and mobile only banks can excel. These technology-focused banks can provide P2P lending services, by matching lenders, borrowers and satisfactory interest rates, then charging a fee that will enable them to provide higher ROIs for their customers.  

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Kevin Benedict, Head Analyst for Social, Mobile, Analytics and Cloud (SMAC) Cognizant

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Learn about mobile strategies at MobileEnterpriseStrategies.com

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.

Banks, Mobile Technologies and SMAC, Part 1

The mega-trends of SMAC (social, mobile, analytics and cloud) plus IoT (Internet of Things/Connected devices/M2M) are changing entire industries.  I am being asked frequently now to meet with IT and business teams to review how SMAC and related trends are impacting various industries so companies can better plan to meet these transformations.

My colleague at Cognizant, Peter Abatan, is both a banking expert and a mobile technologies expert.  Recently Peter has been sharing his thoughts with me on the topic of how SMAC (social, mobile analytics and cloud) trends are impacting the banking industry.  Here are some excerpts from our exchanges:

• Bank branches are predicted to see diminishing foot traffic (visits per branch) at a rate of 8-10% each year for the next 8 years.  People are using mobile apps in increasing numbers rather than visiting branches for routine banking tasks.
• Given the popularity of mobile banking apps, the banks with the smartest and most responsive mobile banking infrastructure will have a competitive advantage.
• If banks do not quickly evolve and educate their customer base on the advantages of mobile banking and digital transformation, other competing banks will, and they will use it to their advantage.
• Traditional banks are feeling an increasing pressure to transform because their current size, structure and legacy IT environments prevent them from adapting rapidly enough to meet new challenges and to address the changing behaviors in the marketplace.  Many banks will become smaller and more nimble as a result of these pressures.
• Social media impacts the way banks sell and market their products.  People talk about their banks, the service levels they receive and the price of service fees. If a bank tries to sell a customer the wrong product, provide poor service or charge a higher than appropriate service fee, then the customer’s network of contacts will learn about it quickly.
• Crowd-funding platforms like Crowdcube and KickStarter are offering higher returns on investments than traditional banks.  This is an emerging threat to traditional banks.  These crowd-funding platforms have far lower cost structures to maintain than a traditional bank with branches and labor intensive sales and marketing channels.

Read Part 2 of this article series here.

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Kevin Benedict, Head Analyst for Social, Mobile, Analytics and Cloud (SMAC) Cognizant

View Linkedin Profile

Learn about mobile strategies at MobileEnterpriseStrategies.com

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.