What's next for whiz-bang banking technology? It depends on whom you ask.
At the Mobile Banking and Commerce Summit this month in Miami, there wasn't a lot of consensus about where banking technology is headed now that many banks and credit unions have gotten mobile banking down pat.
Here are some thoughts from the industry on how we'll be banking in a few years.
Mobile wallets are not inevitable
There are a lot of companies, including Google, betting on mobile wallets as the next big thing, but many in the industry are privately skeptical that it will catch on without banks and retailers sweetening the deal substantially.
A mobile wallet is a payments system that uses an app on your smartphone, linked to a credit card, debit card or prepaid debit card, to make payments in person at a physical point of sale.
Mobile wallets will need a simple, intuitive interface combined with the ability to redeem discounts and loyalty rewards before customers will feel compelled to adopt them, says Lisa Stanton, executive vice president at Monitise, a banking technology services provider.
"(Consumers) won't do it unless they feel like it helped them," says Stanton.
She also doubts mobile wallets will ever completely displace physical wallets, despite marketing that suggests otherwise.
"You use your wallet for much more than a place to hold your cards. There's a lot more in your wallet," Stanton says. "I almost think it's a contradictory thing to call it a wallet on the mobile device. It's not a wallet."
Banks need to branch out on mobile
Banks have pretty much run out of new account management tools they can stuff into mobile banking apps, says Carl Snyder, a senior industry principal at SAP.
Now that many banks have built apps with bill payments, checking account transfers and other tools, they're going to need to push into perfecting person-to-person payments and mobile commerce to break new ground, Snyder says.
"Mobile banking is what it is," Snyder says. "It's mobile commerce where all this is going."
Snyder says banks need to use all the data at their disposal on account-holder transactions to get to know account holders' buying preferences. With that information, they can then effectively partner with businesses to offer targeted deals and discounts that appeal to account holders.
Banks need to be careful to do so in a way that's not annoying. That starts with making everything "opt-in," so that account holders feel like they're in charge of the process, and taking note when customers tell you they're not interested, Snyder says.
Mobile banking and online banking are a double-edged sword for banks
It's much cheaper for a bank to serve customers online and via mobile banking, but it's also harder to sell them additional financial products when you don't see them face to face.
"From an efficiency standpoint, we wanted people to use those channels because it was less expensive," Snyder says. "The flip side of that, then, is I have less interaction with the bank, so the bank doesn't have the same opportunities to cross-sell me now."
And, while customers might welcome a chance to avoid sales pitches, there is a value for account holders in being able to connect together different financial services in the same app, says Neil Hickey, mobility lead for Accenture’s North America financial services practice.
"Really connecting all of the different services within the bank," Hickey says. "My mortgage with my stock portfolio with my line of credit. Many banks are still siloed there."
When it comes to mobile banking, it's the security, stupid
Security is still a major roadblock to using mobile banking for a lot of customers, Hickey says.
"Security continues to be a real challenge," Hickey says. "Biometrics is a very hot topic."
Many companies are working on using biometric data such as the unique sound of a customer's voice or an image of their fingerprints or even retinas taken via a smartphone camera as part of a multifactor method to authorize transactions on mobile devices, says Matthew Friend, a managing director with Accenture Payment Services, North America.
"We've seen a lot of technologies that put all this together, " Friend says. "You get to the key factors: something you have, something you know, something you are."
Where do you see banking going? Would you use all this technology?
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