This is an exciting time for Australia’s banking and finance sector. Apple Pay and the growth of wearables demonstrate how mobile technology is opening up opportunities for financial services businesses to redefine how consumers interact and manage their money.
The big four banks in Australia saw investment in software bearing fruit in improved efficiency, revenue growth and customer satisfaction in 2014, but still face challenges with technology. This year, banks must further embrace technology-driven changes and look for new opportunities in the customer war for relevance.
So where are we now, and what impact will the rapid development in mobile technology have on the future of banking and finance?
Importance of mobile
Adoption of mobile for the banking and finance sector is no longer an option.
Research shows that more time is spent in mobile apps than in all of the web combined, with predictions that by 2020, 80 per cent of adults in the world will have a smartphone. And, according to Visa, Australia is leading the world in the adoption of contactless payments, and Apple Pay will only accelerate this. Mobile is no longer an option, but a necessity and a key channel for delivery of financial services.
While the major players like CBA, ANZ, NAB and Westpac recognise the importance of mobile and have apps which deliver their core business offerings, a great mobile experience that allows people to access their money when and where they want is now the norm. It is not sufficient if you want to increase customer satisfaction, grow revenue or increase efficiencies with your organisation.
Meeting consumer demands
We live in the age of the ‘entitled consumer’. These consumers expect more, trust their peers, are informed, have choices and have a voice. Consumers feel entitled to real time 24/7 banking services, access to their financial information when and where they need it, secure and convenient transactions and a seamless experience.
When this is not the case, there is outrage. You only have to look at the reviews on the App Store to see how damaging a bad user experience can be for a brand. If you have a product that doesn’t meet consumer expectations, bad App Store reviews are just the beginning. Social media provides consumers with multiple channels to amplify their frustration. When CBA’s services were disrupted in April 2014, customers took to Twitter to vent their frustration.
Needless to say that this can be very damaging to a brand’s reputation.
Smarter use of data
Customers not only expect a mobile service offering, but demand smarter use of their information. Digital and mobile are a huge opportunity for banks to innovate and personalise the customer experience. The financial services industry has access to a wealth of consumer data, which can be harnessed to deliver personalised experiences. That’s why mobile innovation is critical.
A good example of this is the Grow by ANZ app. Grow is the first app in the world to combine banking, share trading, superannuation and soon insurance in one app. By combining super with basic banking functionality, ANZ saw improved engagement among its customers, with customers checking their super while performing their everyday banking activities. Since its launch, Grow has also seen a strong increase in the number of trading accounts being opened because of the app.
What lies ahead: Four areas to watch
So where are we headed? What lies ahead for mobile banking and finance throughout 2015?
Contactless payments will become the norm for mobile in 2015 and beyond, with people moving from tapping their cards to tapping their phones to pay for everyday items. According to Visa, Australian’s are hooked on tap and go payments, Mastercard envisages the death of the wallet, and Apple Pay is set to accelerate mobile payments. You can be sure that the major players such as the big four banks and Visa and Mastercard are working hard right now to carve out their unique service offerings in this space.
Businesses that embrace biometrics and deliver the highest levels of security will stand the test of time. With the opening up of Touch ID in iOS 8 to third party applications, users will start to expect easier and more secure login options to their financial services apps. Visa and Mastercard are also working together to develop improved authentication standards for online payments, which will take advantage of biometrics and make existing processes more seamless and shield against competition.
Wearables make an impact
Wearables will start to change the way we interact with financial services. There’s no denying the growth and interest in wearables at the moment, but the biggest changes will come from businesses that make innovative use of wearables to provide consumers with more time savings and remove barriers to make things easier. The announcement of the Apple Watch and how it can be used with Apple Pay will see financial services businesses start to re-imagine how we’ve always done banking and finance.
New players, more innovation
The emergence of new players in the financial services space will create more competition and therefore more innovation. The latest release of the Cash by Optus app is a great example of this. Telcos are not just interested in networks and hardware; they now have a big stake in enabling payments as well. Companies who come up with the most innovative changes and challenge the existing norms using mobile technologies will do well in 2015.
Lucia Vuong is mobile specialist at Outware Mobile