Which would you rather lose: your mobile or your wallet?
It’s not a trick question, and the answer provides a fascinating insight into the way we’ve changed what we do and how we do it as smartphones become smarter and more connected.
For a rapidly growing number of people, the mobile device is replacing the wallet as the repository of identity data and the means with which to perform transactions. It’s not overstating it to say the mobile is the new wallet.
This is not just an observation about developments in technology. As the most avid users of technology understand, technology is about the individual. Technology is personal and it is fast becoming the critical element in the relationship between customer and service provider.
It’s a paradigm for all service providers to grapple with, but perhaps none with greater urgency than banks, which play such a critical role in people’s lives.
Technology enriches relationships
A recently released report from Telstra, Mobile Identity: the Fusion of Financial Services, Mobility and Identity, drawn from a worldwide consumer survey, found an inextricable link between trust and technology. Trust is a key factor in consumers’ choice of bank: 53 per cent nominated the security of their finances as their uppermost concern, but almost as important were security of personal information (52 per cent) and reputation for data security (48 per cent).
It's personalised: How the finance sector woos Gen X and Y
Today’s customers expect more of their bank. They want not just access to a suite of services via their mobile devices; they expect banks to personalise these services to their precise needs, and they expect that information to be secure.
Oddly enough the way you think about digital technology and innovation may be entirely different depending on your demographic, and your level of comfort with the technology. Those who are wary of new technology and change see innovations such as mobile banking as depersonalising and a hallmark of poor service, while others consider digital technology as an enhancer of personal and professional relationships.
“Digital has enabled younger generations to understand the possibilities of personalisation probably more so than older groups more familiar with the traditional way of banking,” explains Telstra global industry executive Rocky Scopelliti. “Personalisation is a theme that comes out in terms of their expectations, personalisation is something that they expect irrespective of how they engage the institution, whether that’s through a physical channel or digitally.”
Power of personalisation
This drive for greater levels of personalisation will ultimately appeal to all demographics.
“What’s now coming through in a lot of the technology developments from financial institutions is the ability to treat customers for who they are irrespective of what generation they’re from,” Scopelliti says.
ING Direct Australia chief operating officer Simon Andrews describes those born from the mid-sixties onwards as “empowered” by technology. They expect products that are available digitally to be relevant, “easily consumable, easy to operate as and when they want”, he says.
“If you want to get into Gen X and Y’s ecosystem, you have to be relevant and the relevance is even on the interface,” Andrews says.
The new normal
The general manager of banking and financial services at Roy Morgan Research, Jason Hulme, describes this level of empowerment, and the expectation that digital technology will enhance relationships, as “the new norm”.
By 2020, 10 per cent of people in Australia will be doing their banking via mobile alone – currently it’s 5 per cent – and the demand is for more than simply checking a balance or transferring funds. “We’re now seeing a groundswell of individuals, particularly Gen X and Y, wanting to do more through their mobile device,” Hulme says.
Noting the convergence of the wallet and the mobile phone, Scopelliti has coined the term “no-fin-app-phobia” – the fear of not having your phone and not being able to access your financial services.
The device itself provides a more personal form of identification than a PIN or password – such as facial or voice biometrics – and this makes the mobile device doubly important. It’s also changing the nature of trust and identity.
“We’re shifting now from a trust paradigm of having to prove who we are to being recognised for who we are – and digital technologies, particularly mobile, are enabling us to do that,” he says.
Adam Bennett, executive general manager, digital and direct banking at National Australia Bank, says the bank attracts 1.5 million log-ons a day, and 70 per cent of these are via a mobile device.
“People’s appetite to use their mobile is growing and as I say to my team, they’re the lowest numbers we’ll ever see because these forces are just going to accelerate,” Bennett says.
Future in feedback
For banks, the realisation is that technology is not an end in itself: it’s what they do with it that is crucial to appealing to consumers. But this understanding doesn’t make planning for the future any easier.
“It’s proven notoriously difficult to predict the future if you look backwards and look at some of the predictions that came out,” Bennett says. “The key thing is not to predict what is the next potential gadget but really what are the capabilities you need to develop as a company and how do you get that feedback loop going.”
The focus, Bennett says, needs to be on building relationships with customers and creating feedback capacity to ensure financial services remain relevant as technology changes.
Ultimately, Andrews reminds us: “One thing has never changed – it’s always been about the customer.”