Mobility continues to lead innovation priorities across banks globally. Most offer their customers a basic banking application while many have already scaled up their mobile banking capabilities to enable on-the-go financial transactions.

Today, mobile banking has become an essential service. Over one-third customers make decisions based on user-friendly mobile banking solutions.

Although mobiles are one of the most economical banking channels, there are some challenges to be addressed before the mobile phone can become the primary banking interface. Foremost, most digital banking services fall short of customer expectations in terms of features and functionality. In the US, despite hefty yearly increase in mobile banking users, usage frequency actually dropped by a third between 2012 and 2013.

Banks need to reassess and align their mobile strategies around key customer behaviours and needs. Also, in a mobile-first economy, banks will also have to look beyond the basics. Today, only a few banks leverage the power of mobility to translate engagement and loyalty into share of wallet. They need to take a holistic view of the possibilities and potential of mobile banking, both from customer satisfaction and enterprise profitability perspective.

Integrated experience Banks need to create a rich, engaging and integrated mobile experience.

According to the Innovation in Retail Banking 2014 report, fully automated account origination topped the list of innovations that banks are pursuing in the online channel. In addition, there are reports stating that new accounts activated through mobile devices accounted for up to 20 per cent in 2013 and this is expected to rise five-fold by 2020.

If customers are basing their choice of bank on its mobile capabilities, then a simple, solid and streamlined account opening experience could indeed be the lever for customer acquisition. Moreover, banks should be able to leverage the native capabilities of mobile devices, like the camera for data capture or the unique device ID for authentication, to make the experience seamless. The entire process must be designed to alleviate the need for any physical intervention at any stage, right from submitting and tracking the application to funding the account.

Sales strategy Banks should also define a sales strategy that leverages the potential of mobility to create additional opportunities for up-selling or cross-selling.

The potential of the mobile device to deepen and expand customer relationships is under-leveraged. Currently, few mobile apps are optimised for sales and marketing activities or for allowing customers to apply for new services. One study has estimated that cross-selling, customer retention and cost reductions can yield a potential return on investment (ROI) of close to 16 per cent for mobile banking.

The combination of transactional information and locational data allows banks to deliver relevant product offers, in real time, at the point of purchase, thereby increasing the chances of opt-in when compared to a standalone offer. As mobile usage grows, banks will need to hyper-personalise offers based on transactional patterns of customers, to ensure a higher rate of mutual productivity and value.

Successful hyper-personalisation derives from actionable insights gleaned from customers’ transactional and contextual data. Thus, it is important to gain a holistic understanding of a customer’s financial needs, context and behaviour. Customers expect their financial service providers to proactively help them with personalised and real-time analyses. Today, three-fourth of banking customers who use personal financial management (PFM) tools have to rely on external solutions, but 40 per cent of them say they prefer to have these tools on their own bank’s website or mobile app.

Assisting customers in quantifying and realising their financial aspirations can help build a more engaged, loyal and profitable customer base.

Mobilising the workforce Mobile-first is a cultural shift that affects consumers and employees. In a recent survey by Cisco partners of bring your own devices (BYOD) practices, the banking industry declared itself the most prepared for BYOD, as compared to other sectors.

As banks pursue consumer-focused mobile-first strategies, it makes sense to adopt a similar approach to empowering employees. One study observed that organisations that have embraced BYOD were likely to post higher numbers in terms of sales, customer acquisitions and profits, thereby enhancing employee satisfaction.

In banking, mobile devices can empower field agents and sales personnel to deliver an enhanced level of service and engagement by having access to information and applications in real-time. Moreover, it makes sense to embrace BYOD than cope with the risks of unauthorised use of devices on the enterprise network. Banks, therefore, need to unlock the potential of BYOD while taking precautions to mitigate mobile-related security risks.

Mobile-first or bust As banks embark on delivering a comprehensive mobile-first banking experience to customers, it would be worthwhile to acknowledge a new breed of competition that is betting on being mobile-only. Their promise is not about apps that deliver access to products and services; it is about reinventing the banking experience around mobile devices. For a tech-savvy younger generation, that’s a promise hard to ignore.

Banks will have to define a mid- to long-term innovation road map that will accommodate future developments in mobile device technologies as well as the impending wearables revolution.

The emphasis will have to be on redefining banking around the potential that these new technologies afford rather than simply adapting them to incrementally improve banking as we have known it.

Venkatramana Gosavi is Vice President & Regional Head, Growth Markets, Infosys Finacle

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