Why Financial Services Organisations Fear Mobile
Blog: Kofax - Smart Process automation
The internet is bursting with articles and content about the value of mobile technologies. While this idea may be entertained (and possibly implemented) by many financial services organisations, far more organisations are taken aback by this innovation and decide to keep business (and processes) as usual.
It wasn’t that long ago when consumers were restricted by the constraints set forth by financial services organisations as standard business practices. For example, customers were required to walk into a brick and mortar location to conduct business during the hours the FS organization deemed appropriate; business was not conducted after the doors were closed.
It was the industry that determined the rules. If a customer chose to change to another bank or lending institution, he or she would be prepared to have copies of paperwork, forms and checks to take to a new bank. Of course, the new bank would likely have the same hours, terms and standard business practices as their previous bank.
Financial institutions would have to be living under a rock if they didn’t realize how their industry has changed. “Transformed” may be a better word. The British Bankers Association and Ernst & Young reported the daily value of digital transaction made via mobile and online banking is over £1B in the UK alone. Mobile technology has liberated the consumer and banks are now beholden to their customers.
These financial services firms (fintech) have their reasons for implementing mobile; allowing them to offer a broad range of services that helps customers manage spending, save money and invest for the long term. While banks focus on expense, these fintech organizations focus on revenue growth and expense. This revenue growth stems from successful customer onboarding and engagement.
Some of these financial institutions feel this migration to mobile too great a change for their organisation; some don’t know how and where to begin. Others feel their dollars are better spent upgrading older business platforms and for good reason, CEB reports that 67% of banking platforms are over 8 years old.
According to Forrester, 41% of business decision-makers believe that IT is an impediment to accelerating business success, representing an even greater barrier to keeping up with the competition. The transactional relationships of the past requires financial institution to provide better value to customers and the delivery method is mobile.
For the fearful, late-to-the-table innovators, the external pressures to adopt mobility will increase. Transactional costs, increasing regulations and compliance demands continues to rise. Consumers no longer need a brick-and-mortar location to do their banking; it will be handled online from their mobile device. The banking customer base continues to expand, from millennials to third-world countries. Even the competition has evolved. In the UK, challenger banks like Starling, Aldermore and Virgin Money are slowly taking market share from larger lending institutions and reporting 3-4 times the amount of profitability.
Has your bank liberated you, as a consumer, with mobile technology?