Mobile banking: One channel to rule them all?

Such findings need to be viewed from the correct perspective. A survey of, for example, mobile music market before iPod/iTunes came out, would have given no indication of such market's true potential (and provided no clues as to the killer apps to monetize that potential).

Hence, it is important to focus not on what consumers have and do now, but on the "ideal world" user experience. Statements such as "X% of consumers use Y to do Z" are of little practical value. One needs to understand what "Y" needs to be replaced with (and why!) to compell 100% of consumers to do Z that way.

It's not about a better mousetrap, it's about a game-changing approach to pest control altogether.

Marvellous. As a channel becomes adopted in Banking so speculation begins that any previous channel becomes obsolete. In Banking this is definately not the case.

In the beginning was the branch. MetroBank, Virgin Money and the Co-op have all recently demonstrated their faith in the physical branch as a channel and consumers still take comfort in the presence of the high street branch. The branch is still good.

It was followed by the ATM. Initially dispensing cash back in the 1960s the channel was soon capable of conducting transactions - paying bills and even topping up mobile phones. It maintains its usefullness as being the only place, out of bank opening hours, to obtain cash from.

Then there was telephone banking. Increasingly convenient and allowing 24x7 access to banking personnel. Still important today, especially in emergencies such as lost cards.

Internet Banking followed. Enabling transactions to be carried out by individuals, reducing banking processing costs the clicks were forecast by some to toll the death knoll for the Branch. But wait. The Bricks, the ATMs and Telephone banking all still exist today.

And now the "new kid" on the block. The Mobile. Now lauded as becoming the channel, taking preference over others. Umm not yet say I.

The new apps may be more convenient to customers, but will this mean the abandonment of other channels?

No. Because of the HUI (Human Unit Interface). The HUI will continue to use differing channels for different transactions and activities. The ATM for cash withdrawals (the mobile wallet is still not widely adopted). Telephone banking in emergencies. Internet Banking where the GUI interface is clearer.The bank branch for personal financial planning.

 For the Mobile to be the one channel to rule them all the HUI will need reprogramming - and that will take some considerable time.

Alexander and Mark

It's interesting to read your comments and reactions.

Alexander -- I completely agree with you that the true potential of mobile banking is to create better ways for people to do existing things, and to let them do entirely new things. You are absolutely right that mobile banking leaders need to be thinking about what they could use mobile banking to help their customers do, and not just focusing on what customers are using mobile banking for today. Most of those I have talked to are doing just that.

Mark -- I'd like to make clear that Forrester didn't say and doesn't believe that mobile banking makes other channels obsolete. Quite the contrary. You quite rightly point out that millions of people in the UK and across Europe still use branches, ATMs and telephone banking and will continue to do so for the forseeable future. What the addition of a major new channel like mobile banking does is that it changes the dynamics of customer behaviour. A few customers give up one or more existing channels entirely. Many customers start using the existing channels differently as they start to use the new channel for some things that they had previously used the established channels for.

We expect mobile banking to be used for a rapidly growing share of interactions, i.e. that mobile banking will account for a growing *volume* of the interactions customers have with their banks. However, many of the most important or valuable interactions, will continue to take place in established channels for precisely the reason you articulate: most people still want to talk to a person when taking important decisions about their finances. So branches and the telephone will continue to account for a big share of the *value* of interactions between banks and their customers.

I hope that clarifies our perspective.

The title on this article, 'One channel to rule them all?', is Finextra's question not Forrester's view.

Best regards,

Benjamin

Benjamin, great comments, thank you. I especially liked your view that "we expect mobile banking to be used for a rapidly growing share of interactions, i.e. that mobile banking will account for a growing *volume* of the interactions customers have with their banks."

From that perspective, Brett King summed it up pretty well: "Banking is no longer about a place you go to, it is something you do." I am glad most of our competitors don't get it.

Yes, I'm with Mark on this Benjamin.  The finextra preamble does seem to have overstated your case.  Mobile banking will continue to be just one more delivery channel.  If we were to rank channels in terms of importance, surely internet banking was the big breakthrough, with mobile banking just a variation on that?

Nick, that depends. If you could do - easier and faster - via mobile phone (app or voice) everything you do now by visiting the branch, wouldn't that be (more) convenient for you? Unless you fancy that person behind the counter, of course (just kidding).

Nick, not sure we overstated Forrester's case, although we did paraphrase. The standfirst takes this quote from Benjamin's own blog on the report: "Mobile banking is a much bigger deal than cash machines (ATMs), credit cards or home-based online banking".

Tend to disagree with Nick Collin where he said "....If we were to rank channels in terms of importance, surely internet banking was the big breakthrough, with mobile banking just a variation on that?" Internet Banking surely was a revolution for all good reasons, but mBanking is a much bigger, deeper, more profound revolution. You can not deny that IB is restricted only to people with internet connection - either at home or office. It is restricted to desktops and laptops - therefore void of mobility. On a world population of 7 billion, there are 5 billion mobile phones but only 2 billion bank accounts. Think of the huge potential of 'reaching' these people in the developing world who dont have access to internet, ATMs and even brick-n-mortar branches, but they need some sort of banking to manage their money. Even in developed world, think of the convenience of doing banking 'on the go', without having to wait till you go home. It's all about mobility. When you leave your home, the things you never forget to carry are your wallet, your keys and of course, your mobile. When we convert that mobile into a successful mCommerce tool, we integrate all payments/wallets (NFC), loyalty (Tesco, Starbucks etc.), location based targeted offers etc. in one Mobile app - that mobile in your hand becomes the most attractive revenue minefield in the world. Yes we still didnt figure out how to monetize mCommerce yet, but eventually we will. We have the vision, wait sometime when mShopping/mCommerce gains real traction. Mobile Banking & Mobile Commerce is an epic revolution - not only for the Banks or the end customers on the streets, also for Telcos/MNOs/Card Schemes everyone. Mobile has created/is creating a completely new ecosystem - just watch this space!. It is seriously exciting.