Recent research from payment solutions company TSYS,
2016 UK m-payment and P2P payment consumer study, highlighted a significant increase in mobile banking adoption in the UK last year, to 67%, from 58% in 2015. Furthermore, the research finds that 68% of people in the UK are likely to use mobile payments for in-store purchases within the next two years. Banking organisations worldwide have responded to this demand, injecting considerable investment into smartphone technology.
Innovative applicationsSantander made headlines recently following the launch of its revamped mobile banking app, featuring a new voice command feature. The bank is the first to offer this service, which will allow customers to “make payments, check their balance, find out how much they've spent and report a lost card just by using their voice”, writes
This is Money’s Lee Boyce.
This is the latest in a string of mobile technology developments. The State Bank of India (SBI) recently
announced plans to launch its own digital bank in the next three to six months – all transactions via the SBI Digi Bank will be carried out with the help of apps, internet and mobile banking – while London-based digital banking service Monese has
reportedly raised $10m to help expand its offering, which allows users to instantly open a current account using a mobile app, to mainland Europe.
The new Santander technology, which differs from voice biometrics – where users “access their accounts by using their voice as a password” – is still under development, Boyce notes. While the service is available for iPhone users signed up to the SmartBank app, it has not yet been developed for the Android market. However, according to Ed Metzger, head of technology innovation at Santander, it “has huge potential to become an integral part of the future banking experience” and could redefine “how customers choose to manage their money”.
This is Money article
Advanced ATMsSmartphones are making waves in other banking applications too. US firms are jumping onto the card-free bandwagon, this time to improve the ATM experience. “Customers who don’t want to fumble around in their wallet for their ATM card – or who have misplaced it for the umpteenth time – will soon be able to unlock cash dispensers’ coffers by using their phone,” says
The New York Times’ Stacy Cowley. The majority of US banks are using, or developing, near-field communications (NFC) technology for these applications – a chip already included in most modern smartphones for mobile payment purposes, such as Apple Pay.
57%
of millennials would swap banks for a better technology platform solution
JPMorgan Chase has already activated cardless technology on hundreds of ATM machines in four “test cities” – including Miami and San Francisco. According to Cowley, 6,000 more of these machines have been upgraded and are ready for use. Other organisations, including Bank of America and Wells Fargo, are planning to introduce similar “cardless options” on all of their ATM machines by the year-end. However, over in Europe, the Czech Republic’s Air Bank is also piloting a
new contactless ATM machine – the CS 2020 – in partnership with connected commerce firm Diebold Nixdorf. The technology enables consumers to withdraw money by tapping an NFC-enabled card, stick or sticker, stuck onto a smartphone, onto a card reader and entering a PIN.
Approximately 2.5% of the 425,000 ATMs in the US are currently set up for cardless access, according to Crone Consulting research, cited in
The New York Times article. This is expected to rise to 25% by autumn. The company’s CEO and founder Richard Crone believes the biggest prospect for cardless access will be the expansion beyond traditional bank accounts to financial services in general. “Think of things that don’t have cards issued against them, like money market accounts or Venmo. Unlocking cash access to those accounts would be a really big deal,” he says.
The New York Times article
Responding to digital demand
The demand for digital services is high, but no more so when it comes to the younger generation – and banks are being forced to respond more quickly and innovatively than ever before. Writing for
The Huffington Post UK, Mark Grainger, vice president of European sales at Engage Hub, notes that 57% of millennials would swap banks for a better technology platform solution. “With so much choice now on offer, customers will easily go elsewhere – to digital-first challenger banks or fintech start-ups – if they do not get the level of service they expect,” he says.
Apps are, evidently, an important part of this, but “good communication and engagement with customers”, facilitated by the use of technology, are also key. Banks are making progress in finding new ways to reach their customers, taking inspiration from popular private messaging apps such as Facebook Messenger. Turkey’s DenizBank is leading the way in this area, using Facebook banking – a social media-driven channel where users can transfer funds, manage their accounts and speak to customer service representatives – to reach out to customers. In addition to engagement, banks can leverage valuable customer data to set themselves apart, according to Grainger: “By analysing the data and behaviour of customers, banks can personalise their offerings and keep ahead of the curve by addressing the priorities of each individual customer.”
Mastering digital banking will involve “fundamentally changing the attitude of financial institutions to embrace technology that helps meet their customers’ ever-evolving demands” says Grainger. Apps and advanced digital services will certainly be an important part of a bank’s offering going forward, but achieving a “scalable, secure and seamless cross-channel experience to customer service” is integral to attracting and retaining customers. Those that fail to do so could be left behind.
The Huffington Post UK article
Seen a blog, news story or discussion online that you think might interest CISI members? Email rosalie.starling@wardour.co.uk.