Contributor: Jon Bluth
Since it was introduced 20 years ago, mobile technology has evolved to become one of the most widely deployed innovations in modern history. There are more than 5.3 billion mobile devices in use globally[A1] ; nearly 80% of the world population owns a mobile phone. In comparison, world-wide there are 4 billion FM radios, 1.6 billion TVs sets, and the number of PCs in use trail behind at a relatively meager 1.2 billion. By the end of the 2011 almost half the US population – 150 million people – will have a smartphone[A2] , and in much of the world the Internet is already accessed more from mobile devices than from computers connected by landlines. But what does this mean for financial services companies?
Nearly 12% of U.S. consumers use mobile banking today – more than 10 million people – and according to Forrester Research, their ranks are expected to swell to 20% of U.S. adults by 2015[A3] . The Yankee Group (June 2011) predicts that there will be 500 million m-banking users globally less than four years from now. And while it is true that some people may never choose to bank or manage their investments using their mobile phone due to security, privacy, or technology concerns, within a few years these people will be a small minority.
Yet with all this growth and widespread use, we face difficult choices around how to prioritize new products and services for mobile devices; the sheer diversity of phone hardware and operating systems, known as fragmentation, is daunting. Further, the rapidly evolving landscape of mobile technology means that the platforms you develop for today will most likely be obsolete in only two years. We will see new technologies emerge and old channels replaced or extended with entirely new devices like Internet-connected TVs, printers, vehicles, clothing, and other devices that have not even been conceived yet. Making the situation more difficult, the return on investment is hard to measure in financial services. Early adopters of mobile have seen little or no additional revenue, and their cost to deliver services has, in many cases, remained the same or increased. So how do you take advantage of the incredible opportunity mobile represents while continuing to enhance your existing channels and protect your bottom line?
There are many parts to a comprehensive mobile strategy – policy, technology, security, support, marketing, the list goes on – and I will address these in future blogs. But an effective strategy that builds real value for your enterprise must be more than just a channel strategy. Starting with a clear view of the business objectives you want to achieve and the problems you are trying to address are important first steps. Here are a few suggestions that can help shape your strategy:
- Develop a clear understanding of who wants to interact with your services on a mobile device and why. This will help steer you towards what to deliver. Carefully consider the trends in your market and use this information to help prioritize your mobile investments.
- When designing mobile offerings, look closely at how the technology is changing the world from a user perspective. In just 20 years the telephone has evolved into an affordable hand-held wireless tool that connects us to anyone, anywhere, and at any time from pretty much everywhere we go. But mobile devices have become so much more; the ultimate personal device, they allow us to streamline and simplify access to services, connect to banking and other financial services, make payments, participate in social networking, receive education, entertain, and surf the Internet. Modern mobile devices share four key characteristics – portability, accessibility, geo-awareness, and personalization. If you want to deliver truly innovative solutions, consider how to apply the strengths of mobile technology when you design your what.
- Don’t forget to include SMS in your mobile strategy – it might have less appeal than ‘apps,’ but text-based messaging is still by far the most widely used mobile device capability – 8 trillion text messages will be sent in 2011 [A4] alone; marketers will tell you that open rates for SMS messages average 4 times higher than email. According to Juniper Research (May 2011), by 2016 application-to-person (A2P) messaging will overtake person-to-person [A5] (texting) messaging.
- Make sure to take mobile computing into consideration when planning ongoing infrastructure investments. Much of the cost associated with enterprise delivery of mobile solutions is related to re-architecting existing application middleware, data and user security. Given the high rate of change in mobile technology, the best way to future-proof your investment is to ensure your current infrastructure is stable, flexible, and extendable.
There are many approaches to build mobile applications; each has strengths and weaknesses. But no matter which approach you take, leveraging your existing assets – data, business logic, security, networks, and so on – will help shorten your time to market and reduce both your development costs and total cost of ownership.
[A3]Forrester Research: December 23, 2010
Mobile Banking Will Displace Online Banking For Routine Interactions