The Year 2017: Mobile Banking Has a Billion Users
Banks and financial institutions are expecting a lot of changes in the future. The consumer-driven digital economy and the mobile revolution are creating an environment where banks will be forced to invest into innovations to keep their current customers and to attract new ones. Information technology will be the most important aspect of this process. ARBES Technologies, Europe’s forefront provider of information systems for banking and finance, believes that one solution would be to implement flexible banking systems with immediate transaction processing and with the option to easily set products as well as a multi-channel access. Banking will continue to be influenced in large not only by the gradual transformation of branches and processing large volumes of data but also by inadequate talent in human resources on all levels of the banking sector.
“Today, mobile banking has become a necessity. It is no longer an advantage as the case was over a year ago,” stated Štěpán Kouba, Director of the Banking Systems Division at ARBES Technologies. Juniper Research supports this statement with a study according to which over a billion people across the world will be using mobile banking by the year 2017. “Simple solutions with wide-spectrum functionalities and above all those solutions, which are easy to use—both for the customers as well as for the bank’s employees—will lead the way. The mobility trend will also be projected into the actual functioning of sales channels. Clients will benefit from the added value of such applications as scanners of postal payment orders and QR codes, localization functions with a personalized offer of products, etc.” added Štěpán Kouba.
Transformation of Bank Branches
The concept of bank branches will be affected by the upcoming changes. Their transformation has already begun to take place in the past and the development of the “branches of the future” will continue this year — as the number of customers logging in from mobile devices continues to grow, as banks experiment with new sources of income and as they focus on profitable customer sectors. It can be expected that branches will decrease in size and their major focus will be the support of new banking products. “Customers will continue to visit branches because of more complex products such as mortgages or investments, however, a number of routine activities will be transferred to other channels. Since expenses for branches are higher, the branches will decrease in size or be transformed to in-store branches or branches with the coffee shop look concept,” stated Štěpán Kouba. The decision as to where to have a full-scale branch and where to open a lightweight version will be of great importance to ensure that coverage is optimal for clients, however so that they are cost-effective as well. The appearance of branches in the aviation industry made a similar transformation in the 1980s – today airline branches are few and far between. “Alternative non-banking payment methods such as Paypal, Braintree, Stripe and technologies like NFC can change the current method of payment and deprive banks of a part of their cash flow. This is yet another reason why banks will need to place maximum emphasis on expense efficiency,” concludes Štěpán Kouba.
Interpretation of Data
Financial institutions will continue to focus more on data and its maximum usage. Data is still a potential source that banks are not using to their full advantage today. The ability to combine unstructured and structured data from various sources will be of utmost importance in order to use this data efficiently in direct channels for the sale of banking products. Marketing and technology will converge thus leading to improved focus, segmentation, offers, timing and efficiency. It will be necessary to identify key data and interpret it correctly.
Since communication with customers is transforming from the printed form to electronic communication, new demands are created for speed and individual communication as well as for saving messages including their archiving. Systems that support personalized communication and effective usage of data will therefore find their way to banking institutions more and more.
Inadequate Number of Qualified Employees
The banking world is dealing with another issue today, which is an inadequate number of talented and qualified individuals. The demand for specific professions that combine experience and knowledge from several areas, for example experienced financial analysts with a command of IT, is growing. “Mutual understanding between the world of banking and the world of IT will be a key factor in subsequent development of the whole field. That is why banks as well as IT companies like ours are already focusing on finding new talent, which will be able to fulfill this aspect,” added Štěpán Kouba.