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In late 2007, the first iPhone was released, bringing with it the mass adoption of a tool that would shape the way people interact with the world around them. The same progress that has seen the rise of revolutionary technologies—like smartphones, wireless internet, the cloud, ecommerce, the Internet of Things, and the rise of Big Data—has shaped the way that banking has evolved over that same brief timeframe and is currently driving the way that the industry will continue to shift in 2017 and beyond.
"Banks will need to put in place the foundational ecosystem of constant innovation and the right partnerships"
With 43 percent of consumers saying that they have used mobile banking—up from 22 percent just five years ago—this is a space where we’ll see huge growth over the next 10 years, especially as that number jumps to 67 percent for the 18-29 age range and 58 percent for the 30-44 range (Federal Reserve: Mobile Financial Services 2016). Below are five of the primary mobile trends that will improve customer experience and improve interaction between banks and consumers as more users continue to go mobile.
Faster Payments for Meaningful Customer Experiences
The next evolution in payments will revolve around the idea of enabling users to make payments using mobile in creative, meaningful ways. This could take the form of channels such as voice, text messaging, augmented or virtual reality, and native mobile device capabilities, but even simple upgrades in peer-to-peer payments will continue to shape the way that users interact with their money.
The ability to exchange money quickly and easily has been one of the most important developments in recent mobile banking history—evidenced by the rise of P2P players such as Venmo, PayPal, Google Wallet and Square, but even social media platforms like Facebook and Snapchat are getting in on the action.
Banks have begun to move in the direction of providing faster payments and removing friction in payment, particularly through partnerships like Zelle, the bank partnership that aims to provide consumers with a faster way to send and receive payments within the security of their financial institutions.
Mobile wallets—such as Apple Pay, Android Pay, Samsung Pay, MasterPass by MasterCard, and Microsoft Wallet— also offer customers the option of where and how to pay, using the technology that everyone carries around with them already through their smartphones.
Another example of speeding up mobile payments is “Scan to Pay” technology that allows users to pay bills by scanning bill stubs through their mobile phones, creating a streamlined, easy and efficient process.
By identifying meaningful ways for customers to pay more when and how they need to, you can improve acquisition and create a deeper level of engagement with users, quickly making digital banking customers among your most valuable.
The Internet of Things
Today, there are more than 10 billion devices connected to the internet, and that number is expected to rise to 34 billion by 2020—24 billion IoT devices and 10 billion traditional computing devices such as smartphones, tablets and smartwatches (The Internet of Things Ecosystem Research Report: A study by BI Intelligence, Business Insider’s premium research service).
With the increase in internet-connected devices—vehicles, lightbulbs, thermostats, speakers, even cappuccino machines—there will be increased demand to ensure that the connectedness of all of these devices are left intact and not siloed, meaning smartphones will continue to be the enabler and hub for these devices.
But while smartphones will be the hub, the actual commands can be fed via voice capabilities, text input or even hand gestures. The consumers’ need for ease of use will continue to refine the way people interact with their IoT devices.
Banks are finding ways to integrate themselves into these devices to offer their customers new ways of banking. For example, Amazon and Google are ushering in voice-activated tools in the form of the Echo, Dot and Google Home, and voice integration with banks will follow shortly. Voice banking will bring on virtually endless possibilities and the immediacy and ease of use is fueling its use.
Open API Ecosystem and API Banking
One key to taking full advantage of these technologies is the use of an open API strategy in order to moderate and facilitate integrations with other partners, such as fintech companies. By making it easy for your own platform to be integrated with these devices, you are opening up a variety of channels —whether virtual/augmented reality, voice interface, interactive projection interface, or even standard PC/mobile device interface as we know it today— to better interact with your customers. In order to facilitate those integrations, open APIs will be especially important in a sandboxed environment.
With the massive amounts of data generated by conversations amongst connected IoT and mobile devices, there is more of a need than ever before to understand the customer’s journey.
One of the strongest advantages that banks have over fintech competitors is that they own the customer data—but how to unlock that data in a way that provides value to customers and opens up opportunities for revenue-producing initiatives is the key. Expect to see increased demand in the area of data science and data analytics to understand conversations and bridge the data amongst various mobile devices and IoT objects. Analytics will fuel better contextual messaging, particularly with mobile devices—learning from the data, through machine learning and/or artificial intelligence, will help to personalize and contextualize the messaging to better serve customers.
Artificial Intelligence and the Growth of Chatbots
As AI capabilities grow, mobile devices will be at forefront of how those tools are used. Whether through voice commands through Siri, Cortana or Alexa, or through text-based tools with sophisticated chatbots, customers’ ability to ask for and receive relevant account information, get assistance with financial actions, or make payments in the moment will become more of a reality with the maturation of AI.
As consumers become increasingly attached to their smartphones—90 percent of cellphone owners say they frequently carry their phone with them, versus just 3 percent who say they rarely do— AI will be able to leverage native mobile capabilities to gather data such as location awareness in order to offer touchpoints like proximity-based offers, location-based branch assistance, and assisted payments learned from prior transactions (Americans’ View on Mobile Etiquette: A study by Pew Research Center).
The technology behind chatbots is also improving to the point where it will become quicker, easier and cheaper for customers to interact with these programs for more personal guidance on their finances than ever before. Whether it’s a simple request such as where the nearest ATM is, or more complicated questions like how much I spent on food this month, chatbots will provide immediate answers to customers who are increasingly comfortable with texting or short messages over phone calls or emails.
Over the next 10 years, open API will evolve into predictive API, where programs can plug into a company’s data and process that data to spot patterns in order to recommend and predict outcomes that lead to a better customer experience.
Staying on the Cutting Edge
The evolution in mobile banking will continue to bring innovations that create differentiated and valuable methods of interacting with your customers in ways that are comfortable to them. Banks will need to put in place the foundational ecosystem of constant innovation and the right partnerships to enable themselves to build creative solutions that delight and engage users.
Remember that each interaction with your customer—whether in person or on their smartphone—presents an opportunity to continue to learn more about their preferences and needs, which will allow you to better serve them in the long run. Make sure that these trends above are on your radar and you’ll be setting yourself up for success.