Online banking through a PC is rapidly becoming old-hat. The rapid spread of smartphones among consumers means that even the most sophisticated services can now be extended to mobile users, transforming the way they interact and take up new offerings from their banks.

For the financial services industry, this presents a new means of touching customers’ lives on a frequent, casual, yet highly personal basis. By proactively reminding individuals of their current bank balance, instantaneously approving overdrafts by text, and offering tailored, context-specific promotions, banks now have the potential to establish and maintain an unprecedented and powerful dialogue with customers, with strong revenue-generating prospects.

The statistics supporting this trend are exciting. By 2013, the number of mobile subscribers who use their phones for mobile banking will have doubled to more than 400m globally, according to a report published earlier this year by Juniper Research.
 
Getting personal
Where initial press coverage focused heavily on the cost savings enabled by electronic communication channels, the direct, timely impact of the mobile medium is now driving new innovation in the way financial services organisations target, engage with and sell to their customers.

PCs can be left behind, switched off and ignored. By contrast, mobiles tend to accompany people wherever they go, and are regularly checked. Research suggests that 38 per cent of consumers would rather go out without their wallet than their mobile phone.

More importantly, consumers want to use their mobiles to access services. They have become the primary vehicle for interaction with the world for the majority of people – whether for connecting with friends and family, or finding information.

The opportunity for banks is immense. Some 4bn people in the world are thought to now carry mobile phones. Meanwhile, by 2015, some 1.4bn people worldwide will use mobile wallets – that’s more than the number of people who have bank accounts.

Within two years, the term ‘smartphone’ is likely to have been dropped, as devices like the iPhone and Android equivalent become the norm. This will pave the way for banks to apply further innovation in the applications they roll out to customers.
 
Clearance to spend
The benefits of mobile technology in the Banking sector are wide-reaching. For example, a text information service from a bank could provide consumers with the ability to request account balances and other content to be served up to them instantly via their mobiles, without the need to register first via the web. As long as the provider has a record of the customer’s mobile phone number, interaction can be initiated on the fly.

The power of simple updates like this cannot be underestimated. One of the biggest inhibitors to customer spending is uncertainty over current account status. If a bank or credit card company can alert customers to this information as they approach the weekend, or while on holiday, this vastly increases their likelihood of spending.

Parents of students could top-up their children’s pre-paid debit cards with a tap of their mobile touchscreen. Holiday-makers could buy last-minute travel insurance from the check-in gate at the airport. The potential is limitless.

The ability to personalise services, and apply them in a timely context, is particularly powerful. The provider of a credit card branded to a football club, for example, would be able to predict a customer’s likely interest in a forthcoming fixture in, say, Prague, using this information to present a customised offer – a discount for purchasing their tickets using the credit card. A more regular dialogue between the consumer and their bank also means the financial services provider will be more aware of their travel itineraries, allowing them to ease security blocks as the customer suddenly starts spending in Istanbul or Peru.
 
Taking the lead
Surprisingly, however, the majority of banks are behind the curve in exploiting the mobile medium fully as a means of both differentiating their services and proactively generating new revenues. Juniper’s research found that some banks are limiting their options by offering insufficient mobile channel options for users, while others have yet to deploy mobile services at all. 

Those who delay rolling out services through this important channel have a lot to lose, especially if rivals are on the verge of launching new services which reflect the changing way consumers want to interact with their banks.

The good news is that piloting services is cheap and easy, and the results are immediate. Armed simply with mobile contact numbers for its customers, financial services providers can try out campaigns one day at a time, and monitor and compare responses. This is all within their own control at a business level, too, since no special technical skills are required.

Holding back is risky. Awareness of the potential impact of the mobile channel is the keenest it’s ever been, which suggests there will soon be an explosion of activity as the more dynamic financial services players channel their creativity in a bid to put the passion back into their customer relationships.
Right now, it’s all to play for.

Shane Leahy is Group CEO at Oxygen8 Communications