The rapid rise of the mobile channel is having an enormous impact on the financial sector. Where do the major challenges and opportunities lie? What possibilities exist for furthering customer engagement? And how can companies make the most of these?
During a free webinar, MOBGEN spoke to three prominent Dutch digital finance experts about their approach, their challenges, and their vision of the future. What follows is a thought-provoking summary of the topics discussed, along with a brief profile of our experts.
Senior Manager of New Business Development at Aegon
Favourite app: “Credit Agricole, for the innovative way in which it allows developers to access its platform and data via open APIs.”
Herco le Fèvre
Former Head of Business Strategy & Innovation at ING Netherlands, now, an independent consultant at Iguacu Payments.
Favourite app: “The Twyp P2P-app is a good example of how young people can be engaged through mobile payments.”
Andries van Luijk
Managing Director at EVI van Lanschot
Favourite app: “My wife’s Rabobank payment app, because of its exceptionally good user experience.”
Relevance is paramount in addressing customers’ new digital and mobile needs.
All three experts have adopted a mobile first strategy. “When developing solutions, our primary concern is always that they must work on a mobile phone” says Aangenendt. “Only then do we look to see whether they can be translated back to the web and tablet devices. The big challenge for us financial professionals is that we are in the habit of incorporating a lot of functionality. Developing for the small mobile screen teaches you to be as simple and elegant as possible. Relevance is thereby always the guiding principle. Research shows that the average mobile phone user makes use of no more than eight apps on a regular basis. If our proposition can’t get into that eight, we’d rather not do it.”
Van Luijk points out that 90 percent of EVI van Lanschot’s contact with customers is initiated with smartphones. “So it’s absolutely a case of mobile first. Convenience and accessibility are therefore always the primary consideration. It is essential that our customers, who are mostly investors and other professionals, can access the most meticulous financial information related to things such as cash flow and investments at any given moment. Making this up-to-date data available as quickly as possible is one of our key challenges. It leads us to regularly ask ourselves how much money we actually still need to spend on applications which are more suitable for desktops and tablets.”
As an independent advisor, Le Fèvre is currently observing a lot of banks and other financial institutions rolling out or working towards mobile first strategies. “However, I’m also already seeing the original pioneers moving on, focussing heavily on an omni-channel approach”, he says. “Of course, mobile is a majorly important pillar in this, but it’s not the only one. These front-runners remember that different customers use different channels for meeting different needs. To make it work, it’s crucial that all these different channels interact flexibly and offer users a truly seamless experience. Knowing your customers well, along with communicating their data to them in a consistent way across the different channels, are essential criteria.”
Alongside relevance, personalisation is another key factor for successful customer contact.
“The challenge with mobile is keeping things easy, simple and relevant to day-to-day life”, says Aangenendt. “Personalisation of mobile services and solutions is thereby an important requirement, certainly in the financial sector. It’s happening, but only sporadically. For example, I hardly see any personalised home screens on financial apps. And how do you replicate the feeling you get when you actually sit with your financial advisor to discuss important considerations for the future over a cup of coffee? Exploring the possibilities in this area is something which my team, and many others in this sector, are now feverishly working on. We are already seeing the impact innovative solutions are having on daily consumer behaviour, particularly with retail banking. I think this is yet to hit the rest of the financial sector, and that a successful response to these matters will make an even greater impact here.”
This expectation is also shared by Van Luijk and Le Fèvre. “We’re currently seeing an apparent contradiction, whereby an insane amount of customer contact is taking place via banking apps”, says Le Fèvre. “While at the same time, banks are having difficulty providing other relevant services. All that contact via mobile, web and other channels reveals an enormous amount of data through which various customer needs can very clearly be identified, including which channels they prefer to use. The challenge now for both retail banks and other financial organisations is to make use of this data to gain better understanding of customers. For example, to gain more precise identification of pain points in the customer journey, which can be helpful when devising new mobile solutions.”
Mobile solutions can be used effectively alongside legacy technology, and obstacles are falling away.
The majority of banks have invested heavily in legacy infrastructure which, as the name suggests, can’t easily be replaced. According to our three experts, that isn’t, however, an insurmountable barrier to rapid implementation of innovative mobile solutions. “In this case it is necessary to disconnect your mobile presence from your legacy infrastructure as far as possible, as this is also still undergoing continual development”, says Le Fèvre. “API technology plays an important role here as it can actually be applied to a lot of existing legacy infrastructure, potentially opening up your back office to your mobile channel without creating problems.”
“We always start by identifying the functionality for the customer”, explains Aangenendt. “Once that’s clear, we test to see if our ideas actually resonate with customers. If it goes well, we look at how they can be scaled up and find the best way of integrating these new components with the rest of our service and platform. In this aspect, we are naturally very happy about the possibilities presented through APIs, which show very promising indications for integration of new technology with old. The process of ongoing testing, learning and upscaling is essential for every financial institution which wants to maintain a good connection with its customers’ wishes and requirements. If you make isolated decisions about if and how to position new solutions together with old ones, the process inevitably goes wrong. You can negotiate this obstacle at a later stage, but thanks to the possibilities offered by APIs and other technologies I also expect it will completely disappear in the future.”
“Because we started from scratch, we have a very young platform with few legacy issues. Of course that greatly helps the speed with which we can develop new services. We presume our applications will have a lifespan of 2 to 3 years, and are continually engaged with monitoring their use and thinking about the next step. If necessary, we handle this new step by initially incorporating just 30 percent of the intended functionality. First make it work, then make it better. You too can do it this way if you’re a first mover, because your customer base will also accept it. On the other hand, as a later adopter you can’t afford to release applications which don’t match up with minimum requirements. In this case the art is in learning from your predecessors and subsequently offering an even better solution. In other words: Be first, or be best!”
The mobile financial pie will be larger in the future, despite legislative restrictions.
All three experts have great expectations for the financial sector’s mobile future. Van Luijk in particular envisions the role played by laws and regulations will be limited. “We already have the experience to know this can often make provision of solutions via the mobile channel unnecessarily complex. We would therefore also like to see technology teams set up within the regulatory bodies, who understand why and how mobile technology provides customers with added value. Particularly in view of the speed at which we try to develop new solutions, we also regularly find ourselves landing in grey areas where we want to ask these bodies for advice, or to connect them with existing legislation. Unfortunately, cooperation in this area is far from optimal, which effectively slows the pace of mobile innovation.”
Both Aangenendt and Le Fèvre, however, emphasise the importance of having safeguards in the system. “Developments are happening at lightning speed, and it is important that everybody plays by the same rules”, says Le Fèvre. “That might mean you can’t always do what you want, but it also protects customers from being burned.” According to Aangenendt it is also up to the financial sector to show the regulation makers that the technology being introduced is of real added value to the customer. “Companies who are able to do this can look forward to a future with enormous growth potential. For example, I expect financial services will increasingly broaden, and there are huge opportunities waiting for parties who aren’t yet associated with the sector. Take for example combinations with retail, connected home or connected city. The lesson is that these new solutions and technology often grow exponentially. The future doesn’t always turn out as we expect. Being open-minded and expecting change is the way to prepare your organisational structure for its best chance of remaining successful. The really disruptive mobile and digital services in the financial sector are, I think, yet to be conceived.”
The above is a short summary of the free webinar in which MOBGEN spoke with three prominent Dutch experts about their approach, vision, favourites and predictions. If you’d like to see the entire webinar, in which a multitude of other thought-provoking and informative subjects were covered, you can now watch it at Youtube.