a day goes by without another bank somewhere in the world announcing its new
mobile app. For many bank executives it appears that when they are asked about
what they are doing about digital they whip out their smartphone and point out
their mobile app as if that is the answer; it isn’t. They really couldn’t be
many of these apps have come about often follows this scenario.
of the banks executives may have been on a silicon valley tour where they have
visited the likes of google, apple or one of many other digital native
companies or they may have had a great dinner with other bankers who have been
boasting about how advanced they are in digital. The next day they haul in one
of their trusted executives – possibly the CIO but more likely to be the CMO
and challenges them to demonstrate quickly that the bank is serious about
digital. This executive in turns calls in one of his team and asks him/her to
pull together a task force to create a mobile application. The team leader
doesn’t want to be polluted by existing thinking so they create a team of young
people who haven’t been at the bank for any length of time, adopt a new dress
code to show they are different and work in a separate office away from those
who could constrain their thinking. Because they have been told that the bank
executive wants something quickly and because they have heard all the cool
companies use them they use fail fast, agile/scrum methods to get the app out
there. The result is a standalone app that is added to the thousands of other
programmes that IT has to support.
a recent detailed study has shown most of the banking apps out there are not
simple to use and provide a poor customer experience, but even if that wasn’t
the case the new customer interface is almost exclusively being served by
legacy processes and systems.
was similar to what happened with telephone banking when HSBC first launched
First Direct. The customer got to speak over the phone to friendly, helpful and
very enthusiastic call centre staff who were using green screen systems that
had been designed in the 1960s details, print them out and then have to rekey
them into green screen terminals. While First Direct may have been delighting
their customers rather than reducing costs it was adding costs to the running of
are three critical business issues that banks across the globe face are
regulation, going digital and reducing costs.
way that most banks are going about mobile banking is paying lip service to
digital and increasing short and long term costs and doing nothing to address
the regulatory pressures.
that go digital in a coherent and end-to-end way can address all three critical
business issues and at the same time grow revenues. What this means is that
when addressing their digital solutions they need to:
– a lot of the costs that banks incur today occur in the back office. By
automating the processes not only will significant costs be taken out but the
speed and the quality of the customer experience will improve and the
compliance to regulation will be far easier to enforce
– rather than designing purely for the mobile channel recognise that customers may
want to start in the mobile channel and during a process either concurrently or
sequentially continue in other channels in a consistent and usable way. For
instance they may wish to start a mortgage application on their smartphone,
when they have a question launch a webchat, book an appointment online in a
branch, have a meeting with a mortgage advisor and finish the application back
on their smartphone. They should be able to do all of this with their mortgage application
seamlessly progressing across the different channels.
process is executed one way today doesn’t mean that changes in the way
customers want to do things or in regulation means that that is the way it will
always be. Inevitably new technologies will come into common use. Process need to be designed to be able to be
– Many mobile applications have introduced new technologies and software into
an over-crowded IT estate. Digital should be used as a catalyst for simplification
and rationalisation. By spending time defining the bank architecture costs can
be significantly reduced and agility greatly increased.
Mobile banking is increasingly important for
customers as that is the way that many want to interact with their banks. However
quickly getting a mobile banking app out there is not the answer. It is the equivalent
of painting lipstick on the pig. Banks that want to be there for the long term
for their customers and to retain, grow and engage with their customers while
increasing their profits need to adapt a more strategic approach to digital.