EX-Lloyds innovation boss chides HSBC over m-banking

HSBC has come under fire from the former head of innovation at rival Lloyds TSB for failing to offer a retail mobile banking service.

  0 4 comments

EX-Lloyds innovation boss chides HSBC over m-banking

Editorial

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

Mobile banking has long been touted as a delivery channel with huge potential. Last year Berg Insight predicted take up is set to soar, with the number of people using the technology growing from 20 million in 2008 to 913 million in 2014.

Only last month research outfit Forrester urged banks to update their strategies in preparation of a surge in popularity as Europe sees increased smartphone adoption.

Yet, alone among the UK's major banks, HSBC offers no retail mobile service at all, prompting James Gardner, now CTO at the Department for Work and Pensions, to ask on his blog: "What is going on HSBC?"

Gardner is an HSBC customer and insists he is a fan of the bank's Premier account and Internet service but suggests the bank is making a big mistake in not gaining experience in the mobile area while it is still relatively new.

He cites the example set by NatWest, which is the only UK bank to so far introduce an iPhone app. Gardner says that the NatWest app is not particularly impressive or rich in functionality but this is not the point.

"Shoving a poor application out the door - like NatWest have done - is teaching them valuable lessons about how customers like to use mobile."

In addition, by introducing the service ahead of its competitors, NatWest is building a relatively small but committed, loyal and important customer base of early adopters.

"Typically, somewhere between 15% and 18% of any audience will bother trying something new - but they're the ones that will tell everyone else about their experiences. Recruitment of these people is the key to building a base," says Gardner.

This argument chimes with that of Forrester analyst Alexander Hesse, who recently asserted: "Banks need to decide whether they want to be a mobile banking leader or a follower."

Gardner speculates that HSBC has fundamentally misunderstood the way mobile banking should be approached: "I'll bet that someone, somewhere, has decided that mobile is strategic, and therefore a global, multi-market solution is needed. I'd guess the whole mobile thing is so strategic to everyone that a big-bang approach seems the only way to make a splash."

This "big bang" attitude is mistaken he argues and an incremental approach that builds up a customer base and provides experience is more sensible, particularly when an iPhone app can be built for "practically nothing".

Update

In response to Gardner's comments, HSBC has provided Finextra with the following statement: "As a founder member of the international Mobey Forum (which advocates and socialises the use of mobiles in banking), we are firmly aware of what others around the world have been and are developing in this space and have been trialling a number of different services and applications around the world.

"Both first direct and HSBC already offer simple alerts and account balance information via mobiles, as well as mobile friendly websites to personal and business customers, but we know that we have even more to do in this regard. We have several projects well underway, at both UK and global levels, that should meet the growing expectations of our mobile customers.

"That mobile banking will accelerate rapidly is widely accepted, but we have first been building the right local and global controls to make sure we deliver a secure customer-centric mobile service, rather than simply re-packaging existing service on a mobile."

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Comments: (4)

Matt White

Matt White North America editor at Finextra

So, the HSBC statement seems to confirm that the bank is, as Gardner speculated, taking its time and looking for the 'big bang' rather than getting to market quickly by "simply re-packaging existing service on a mobile".

Which approach is right?

Michael Fuller

Michael Fuller Former Retail Banker at None

It's just not correct to say that HSBC (UK) offers no retail mbanking facility.

The bank offers both a text message balance alert and report service and the Monilink service. See http://www.hsbc.co.uk/1/2/personal/current-accounts/express-banking/monilink#top

While these services may not be as sophisticated as some other offerings I suspect that once the bank has fully deployed its full OneHSBC Gold Suite in the UK the mobile facilities on offer will quickly expand.

Has James Gardner even checked what's on offer before blogging?

Brett King

Brett King CEO & Founder at Moven

HSBC should know better. There is no excuse for not having a range of iPhone applications already deployed.

Customers don't see a bank that is taking their time to get it right, they simply see a bank that doesn't have an iPhone app. Regardless of their workarounds, etc.

Banks today need to understand consumer behaviour is changing much more rapidly than they can innovate. Organizational intertia and branch-led thinking is the biggest hurdle in generating progressive change in customer experience. Banks either need to innovate the org strucutre so real innovation is enabled, or make a decision to be much more open to partnerships with developers, telcos, cloud platform providers, etc.

Putting a banker of 20 years experience in charge of customer innovation just won't work.

Brett King, Author - BANK 2.0

Ketharaman Swaminathan

Ketharaman Swaminathan Founder and CEO at GTM360 Marketing Solutions

In my exposure to mobile banking in the UK (Barclays) and India (ICICI, HDFC) over the past couple of years, I have rarely found any functionality that leverages its key differentiators of being mobile and handheld.  For example, I don't see much point in finding out my account balance or Last 3 transactions via my mobile phone, when I  can very well do it thru' Internet Banking lot more conveniently. On the other hand, if I could pay my bills wherever I am by simply typing a PAY command on my mobile handset in response to an incoming SMS alert, that would save me a lot of time as compared to doing this via Internet Banking and encourage me to use mobile banking more.  While customers like a responsive bank, when it comes to mobile banking, I think banks can take some time out to figure out strong use cases for mobile banking, instead of pushing it out the door as just another channel.  

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