Welcome to the digital and mobile banking revolution

As the telecom world announced major steps forward with the availability of 4G last month, the banking world is also set for change with mobile likely to overtake the desktop as the primary online mechanism in the next 5 years. Of course this is not solely down to the 4G revolution. For some customer groups and certain transactions, mobile is already the easiest way to access banking information online. This is driven by availability and convenience of mobile banking on smartphones. Within some customer segments ‘everyone’ has a smartphone and their bank details are easily accessible for quick and easy transactions. In this era, mobile will lead the way and is quicker and more convenient than the desktop.

Where the mobile channel will struggle however, is in replacing the desktop for more complex transactions. Consider the range of transaction options available to customers as a pyramid, with large volumes but low individual value transactions such as balance inquiries or transferring of funds at the bottom. Low volume but high individual value transactions like taking out a mortgage are at the top. The low volume transactions occur rarely and usually incur additional investigation and discussions with customers.

So what of the desktop? The key to its future success in the delivery of digital banking will be a move to offering the right services to the right customers at the right time. This will require data analytics to identify customer behavior and to predict what services they are seeking, helping banks to be more responsive to customers’ needs. Banks should also move from a ‘pull’ model, where they are drawing customers into branch and onto their digital bank sites to a ‘push’ model, where the bank comes to the customer and offers them relevant new products or value added services. Timely two way communications will be the key advantage of digital.

This is an important step as customer relationships with banks in the past have always been measured by the level of advice and guidance they provide to their customers. Popping into a branch to speak to an advisor used to be one of the most trusted service relationships. This has been lost in recent years as banking services have moved to a more service oriented model, with call centres. The digital channel is the perfect mechanism to offer this personal advice and guidance again, in a more convenient and cost-effective manner be it via mobile or the desktop.

What role will the 4G movement play? Banks can capitalize on increased availability of high-speed broadband for their customers to help offer advice and guidance through desktops and eventually via the mobile channel. The mobile may be some way behind with regard to complex transactions, but with the increasing availability of 4G over the next couple of years this could also become a medium where these services are provided.

Please note that this blog reflects my personal thoughts and opinions with regards to the future of the digital and mobile banking revolution.