1. Using Mobility toTransform the FinancialServices ExperienceA Step-by-Step GuideExecutive SummaryThis guide outlines five simple steps to help readers understand how mobile applications andservices can help financial institutions transform their customer relationships. Readers willdiscover ways to:1. Use technology to meet direct and indirect changes resulting from new regulations2. Realize the benefits of market and industry consolidation3. Reduce the impact of competition from non-traditional sources4. Leverage technology trends to attract new customers and tap pent up market demand5. Transform the customer experience.This guide can also help readers identify key economic, market and technology challengesfacing financial institutions today.
2. Using Mobility to Transform the Financial Services Experience__________________________________________________________________________________ 2Introduction • ndustry Consolidation – According to the FDIC, the recent IRecent banking and financial services regulations have made an downturn resulted in 140 bank failures in 2009, 157 in 2010 andimpact on almost every operational area in financial institutions. The 40 through April of 2011. In an effort to reduce costs, financialnearly 1,000 page Dodd-Frank Wall Street Reform and Consumer institutions have, in some cases, been forced to reduce the numberProtection Act includes new rules for mortgage lending, risk of branch locations or remote ATMs they support. Failures andmanagement, product development, investment management mergers have reduced traditional competition, new competitorsand customer service communications. Concurrently, technology are arising from non-traditional sources such as payment serviceinnovations such as smartphones and social networking have changed companies (PayPal) and online banks (ING Direct). To grow revenuesthe way businesses and consumers buy, borrow, bank, and invest and and market share, financial institutions must find ways to attractprovided opportunities for non-traditional players (ING Direct, PayPal) and retain customers from fewer physical locations.to enter markets and commoditize key business sectors (i.e. payments). • egulatory Environment – Many observers believe that the Dodd- RFinancial institutions face a new business reality. One that requires: Frank Wall Street Reform and Consumer Protection Act is the most sweeping change to Federal regulation since the Great Depression. • lexibility – to face changeable market, technology and regulatory F It is likely that there will be many changes to the law’s provisions, environments which have been set forth in 16 “Titles” covering everything from • ecurity – to forestall threats from outside agencies and S Payment Clearing and Settlement Supervision to the creation of identity thieves as well as comply with local, state, national and the Consumer Financial Protection Bureau and Mortgage Reform international regulations and internal governance initiatives Anti-Predatory Lending. This has significant implications for the IT organizations within financial institutions that will be charged with • obility – to meet the needs and adapt to the lifestyles of business M managing consumer and business data, risk management, security, customers and consumers reporting and compliance.Creation of a flexible, secure mobile financial service strategy shouldtherefore be a key component in any financial institution’s customerattraction and retention strategy. Mobile services can help financial “ arkets are extremely competitive and in order to Minstitutions attract and retain customers – and increase profitability. maintain their edge, firms are looking for new waysAt the same time, mobile financial services can help institutions to do more with less. Businesses are discoveringprepare for commoditization and forestall inroads from non-traditional that by utilizing mobile solutions, they’re able tocompetitors through service differentiation and personalization. Finally, increase their employees’ efficiency and reach theirmobile financial services are often designed to enhance an institution’sability to comply with an ever-changing regulatory environment and customers via innovative channels that work.corporate governance initiatives. – Steve Levy, CEO of Pyxis MobileIf your institution has yet to implement a mobility strategy, or iscurrently looking at available options for implementing mobileapplications and services, this guide provides simple steps that will • ustomer Centricity – Although the economic downturn may have Chelp you: reduced the number of competitors, businesses and consumers • dentify some of the key economic, market and technology I now have access to more information and pricing information challenges facing financial institutions today regarding credit cards, sales financing, consumer lending, and investing than ever before. Savvy consumers want to interact • xplore the mobile applications and services that can help financial E with financial institutions using the web, mobile, ATM’s and other institutions overcome those challenges in-branch technologies. In the future, loyalty to a particular financial institution may be built upon the consumer’s ability to acquire a • evelop a mobile application service delivery strategy D loan, make a payment or deposit, purchase or sell a stock, or make • elect a partner to implement that strategy S an investment anytime, from anywhere, using any device. • everage industry “best practices” to ensure that the mobile L • ecure Mobile Commerce – Identified as one Gartner’s “10 S application and service implementation is a success Consumer Mobile Applications to Watch in 2012”1. Many of today’s applications are only streamlined versions of e-commerceStep 1: Identify the Issues implementations. However, the emergence of uniquely mobileFinancial institutions seeking to attract and retain customers, increase functions, such as the ability to verify that a mobile location andprofitability, and improve the bottom line face challenges in several card transaction are in the same proximity, or to push targetedkey areas. content based upon mobile location and time (text messages or 2D, 3D bar codes) are examples of features that might transform the financial experience.
3. Using Mobility to Transform the Financial Services Experience__________________________________________________________________________________ 3 • martphone Adoption – Gartner forecasts that U.S. smartphone S Step 2: Explore the Options sales will jump from 2010’s 67 million units to 95 million units Mobile and in-branch wireless applications and services can help by the end of 20112. At the same time, Gartner has lowered its financial institutions: forecast for PC sales by more than 5% stating that mobile PCs and smartphones are now the consumers’ “platforms of choice”.3 • each more business and consumer customers from fewer R Smartphones are also the enabler for location-based services physical locations (LBSs). Location delivers services to users based on their context • omply with an increasingly complex and stringent C and, Gartner expects the total user base of consumer LBSs to reach regulatory environment 1.4 billion users by 2014. LBS deliver features and functionalities in tune with the user’s context, taking into account the user’s location, • ncrease the security of consumer applications I personal preference, gender, age, profession, and intention, thus offering a more-intelligent user experience than basic location services • ntegrate mobile banking and commerce with existing I can. Gartner analysts believe context-aware services are a key trend for financial applications mobile apps, and location is a key enabler of context-awareness. • se smartphones to deliver rich, mobile applications U • erge social networking and mobility to transform the M financial experience 100 “ he mobile industry is no longer confined to just T the mobile phone, it now encompasses all manner 80 of wireless devices, including smartphones and 60 the very latest in tablet computers. Rather than spending time solving device fragmentation issues, 40 the key is to focus on creating a user experience 20 that is consistent novs. PC Sales Smartphone matter what device your employees or customers are using. It is the (in millions of units) 0 organizations that are most agile and adaptable 2010 2011 to change that will succeed and prosper by future proofing against the constant industry advances.” – Jim Hemmer, President and CEO, Antenna • ocial Networking – According to Gartner, of the 19 tracked S applications, mobile social networking is the fastest-growing consumer mobile application4. Social networking sites are Some of the application and service options available to financial becoming portals, transit hubs and cloud storage for increasing institutions to meet their challenges include: amounts of messaging and e-mail traffic, videos, photos, games and • obile Consumer Banking – Enables banks to deliver consumer M commerce. Gartner states: “As mainstream adoption progresses, banking products and services to mobile devices. Services can global social sites will be driven toward providing services in include account information services, the ability to locate ATMs partnership with third parties (including financial institutions) and bank branches, the ability to activate or cancel credit cards using open APIs, and are likely to evolve to a role as infrastructure and manage bank rewards and loyalty points. Mobile consumer providers acting as data warehouses and providing user data and banking includes mobile Internet access to existing Internet baking access to the more-consumer-facing brands.”5 applications as well as support for Short Message Service (SMS)Industry consolidation, new competitors, customer centricity, secure alerts and payment capabilities such as bill payment and fundsmobile commerce, smartphones and social networking; financial transfer. Mobile consumer banking services can also be deliveredinstitutions face a variety of 2007 Source: EIU/ATT survey, June challenges which may have both an using applications designed specifically for the mobile environmentimmediate and a long term impact on their ability to attract and retain using a Mobile Enterprise Application Platform (MEAP). Applicationscustomers. However, a number of mobile application and service constructed using a MEAP, also include configurable securityoptions as well as wireless in-branch applications are available to help features on the remote device as well as within the application.financial institutions meet those challenges.
4. Using Mobility to Transform the Financial Services Experience__________________________________________________________________________________ 4 • nterprise Mobile Financial Services – Enable banks to deliver E • obile Devices in Branches – Mobile devices, including tablets M mobile banking and payment applications that support mobile and mobile phones can be used within a branch for a variety of device and application security, applications that support sales purposes. Tablets can be used by branch staff to move among and marketing, account management, transactions and business customers to reduce queues by performing transactions wireless, intelligence. They also include self-service transactions for mobile run simulation tools to support personal financial management or device (get and view balances, view statements, view transactions, illustrate product benefits to close sales. Mobile phones can also transfer money, pay bills), and the ability to locate a bank branch be used as part of the customer identification process at a teller or ATM. Some systems integrate over-the-air mobile payment window or by a customer service representative. Customers may systems and support the delivery of financial services to under- also use them to interact with an ATM or self-service kiosk at the banked or unbanked customers. The advantages of using a Mobile branch to authenticate access to accounts, or make payments and Enterprise Application Platform (MEAP)to deliver mobile financial purchases. Banks can also use mobile devices to initiate customer- services include: the ability to create new applications and facing activities outside the branch or complete a transaction functions according to local demand, powerful administration and outside the branch that began inside the branch. reporting capabilities, services (including regulatory compliance and security) that can be reused across the solution and the organization, integration with existing back office and management “ s we look at customer-facing applications, there A systems, and support for multiple mobile devices, languages and really are some fascinating things in terms of tying character sets. As Steve Levy, CEO of Pyxis Mobile has stated: “Mobility is no longer a nice-to-have, but a need-to-have, across all together mobile barcodes with MEAP platforms, and industries and the ability to be nimble in developing applications then looking at network location so you can deliver for new user groups as well as adding content and functionality to contextually location-aware information in marketing existing ones is critical. The most important piece of any successful to the individual and tie that in with messaging mobile enterprise strategy is a development solution that allows aggregation and SMS. This is an example of how a you to build, deploy and iteratively update – in real time – cross- number of different capabilities that have been used platform apps that meet the data integration and security needs of employees as well as the UI/UX demands of consumers.” in pieces in the past are now being brought together to deliver full solution portfolios. So now companies • ireless Claims – Historically, wireless claims applications had been W can deliver a really differentiaed consumer targeted at adjusters and catastrophic response units. However, emerging applications are now deployed for customers as well. application and mobile marketing experience.” These applications enable the policyholders to enter a first notice of – Chris Hill, Vice President of ATT’s Advanced Enterprise Mobility Solutions loss (FNOL) using a mobile device. Customers can also request tow services, take photos of damage and insert notes into a claims file. • obile Agent Applications – Mobile agent applications deliver M customer information (including contact and policy details), lead management, needs analysis, illustration and new-business Technology Trends Reshaping Business capabilities to agents. These capabilities support contact • ast, widespread wireless/wireline IP networks F management, calendaring, policy tracking, form requests, application entry and point of sale tasks. Mobile agent applications • owerful Mobile Computing Devices P provide real-time information access and transaction processing using technologies that fit with an agent’s selling style and practices. • loud Infrastructure C • obile Retail Stock Trading – Provides for execution of equities M • ompanies are re-engineering their businesses C trades by a retail investor using a mobile phone or tablet. The five top-tier and some of the smaller discount brokers currently offer this service. Mobile stock trading applications are best suited for• obile Coupons/Bar Codes – Smartphones are quickly becoming M companies that want to offer customers “self-service” options. the way for customers to receive mobile alerts and promotional information. Mobile coupons fall into two broad categories. In the • inancial Social Networks: – Support analysis, personalization and F first, coupons are identified through a code or bar code and sent communication for consumers of financial services. Most have not to the smartphone using SMS, a mobile application or mobile URL. been established by banks and brokerages, but instead by third Using this method, institutions can control the distribution and parties. There are three types of financial social networks: banking redemption of the coupon. The second category of promotion is and personal-financed focused, lending focused, and investment available to all consumers. It is often advertised and communicated focused. Some of the most attractive capabilities for consumers in branches and advertisements. In this scenario, the smartphone include the ability to analyze cash flow and personalize the view is a communications channel and distribution does not necessarily of transactions and alerts. requirement installation of an application on the phone. Mobile coupons and bar codes create an opportunity for financial institutions to enhance their interaction with customers. They also provide measurement and direct response capabilities that are not available in traditional TV, point of sale, outdoor and other types of advertising.
5. Using Mobility to Transform the Financial Services Experience__________________________________________________________________________________ 5 • ultichannel Loyalty – Customers don’t think in terms of channels. M The robust and rich features provided by mobile and in-branch wireless They expect financial institutions to interact with them in a variety applications and services can provide financial institutions with secure of ways: in-branch, the web, call-centers, mobile, and social and regulatory compliant ways to reach new customers, retain existing networks. Mobile and social networking are taking even more ones and transform their financial experience. In the next step we’ll prominent places in multichannel loyalty programs and are key help you determine the applications that are best suited to your factors in transforming customer interactions and attracting and institution’s needs and develop a mobile strategy to implement them. retaining customers. Step 3: Develop a Roadmap • ontactless Mobile Phone Payment – Contactless mobile phone C One of the most valuable tools for financial institutions seeking to payment applications allow customers to pay for a product or develop a mobility strategy, is the technology roadmap. Using a service from their mobile device. Payment transactions use Short roadmap, the institution can view critical assets, the relationships Message Service (SMS), Wireless Application Protocol (WAP), between the assets and the skills, technologies and competencies Unstructured Supplementary Service Data (USSD) and Near Field they need to meet the needs of their customers. Put more simply, the Communication (NFC) to initiate and authorize transactions. Mobile roadmap is a tool that helps institutions combine strategy with actions payments offer retailers opportunities to increase revenues through to meet their market goals. impulse purchases, enhance the customer experience, and build brand loyalty by providing speed and convenience. To construct an effective mobility roadmap, financial institutions should first discuss three questions with key corporate stakeholders: • icroblogging: Microblogging consists of very short messages sent M to consumers via a feed. In the U.S., Twitter is the most famous 1. Where do we want to go? microblog and some financial institutions use it to connect with potential customers at a very low cost. The appeal of microblogging 2. Where are we now? is that as the institution communicates with the customer directly, 3. How will we get there? and the customer may also pass along information to a larger circle of friends. Microblogging, when used as part of an overall social Where Do We Want to Go? media strategy can help financial institutions attract new customers The first process in developing a technology roadmap is to determine and expand market reach without physical expansion. how mobile and in-branch wireless applications and services can • MS Mobile-Loan Technology – Two types of loans can be initiated S help meet current and future market demands. During the process, using SMS on a mobile phone, immediate loan quests in which institutions might ask: the customer initiates a request by sending a text message to an • hy is it important to develop a mobility strategy? W advertised telephone number or a preapproved request where the customer can draw down on a pre-agreed credit limit held with the • ow does the mobility strategy support the corporate vision? H financial institution. • s the mobility strategy part of the company’s overall security, CRM I and compliance strategies?“ he mobile channel is hands down where to invest T • hat are the key market issues that drive the mobility strategy, W for accelerated innovation, brand differentiation, both short and long term? and revenue growth. Financial organizations that • s a mobility strategy critical to remaining competitive? I can deliver on a strategy for both mobile apps and • hat are the activities that customers or employees can’t do today W websites to give customers personalized, convenient that they could do with a mobile application? and valuable services – across all types of mobile devices – will be in a stronger position to engage • hat type of mobility related business information will the W company need in the future? and retain customers.”– Jim Hemmer, President and CEO, Antenna • hat will the mobility implementation look like upon completion? W Where Are We Now? The second segment consists of assessing the impact a mobility • FID – Radio Frequency Identification (RFID) solutions can track R strategy will have on people, processes, and systems. Some questions valuable assets such as cash or bonds. RFID implementations can to consider in this phase include: reduce asset loss, improve the visibility of assets as they are moved within the institution and improve asset availability and inventory • re there areas of the business that are already in the process of A turnover. RFID also has the potential to significantly improve “going mobile”? operational efficiency and reduce risk. • oes the company possess people with the skills to develop and D implement mobility applications and services?
6. Using Mobility to Transform the Financial Services Experience__________________________________________________________________________________ 6 • hich applications and processes can be most easily leveraged to W Once you’ve answered the “why”, “what”, “when”, and “how” of your deliver mobile applications? mobility strategy, you’re ready to share your road map with corporate stakeholders and prospective business partners. In the next step • re current compliance, fraud and security precautions mobility ready? A we’ll discuss how to choose the partner who can help you make your • hich specific customer or market segments are “mobile ready”? W mobility strategy a reality. • re there specific business processes (i.e. account management), A How is ATT Adapting that could deliver immediate cost savings through implementation of a mobile application? Industry Energy Vertical Experts Experts Process ExpertsHow Will We Get There? Solution Experts BusinessIn the third segment, financial institutions might focus on the “what”, Enterprise Architects Intelligence M2M COE“how”, and “when” of roadmap construction. Some questions to Field Force/Serviceconsider include: Co-Creating Strategy Workshops Solutions Process Audits Technology Reviews Asset Management • hich applications will we integrate into our mobility strategy? W Ride-Alongs Plant Tours Machine to Machine • hat are the target timeframes for application implementation? W Disciplined 1. Define Approach 2. Design SCADA • ow will we integrate the applications into existing CRM systems? H 3. Deploy Fraud and security systems? Compliance? Payment systems? 4. Support Trading systems? • hat type(s) of training will our personnel require? Who will deliver W it? When? And finally, how will the training be delivered? • hat will our pilot program(s) look like? How will we measure pilot W program success? Step 4: Select a Partner Mobile and in-branch wireless applications help financial institutions • ow will we track adoption of our mobile application(s)? What H transform their customer’s experience. They also help make employees business intelligence tools will we require? more productive and lower operational costs through improvements in business process efficiency. But to get the most from a mobile • hat will be our process for updating the roadmap? W application implementation, it is important to choose a partner that • hat implementation risks do we foresee? Are there ways to avoid W can provide a full spectrum of applications, supporting a variety of them or reduce their impact? devices as well as the services and support that ensure the reliability of the solution. And, since every institution is unique, make sure that theFigure 1 is an illustration of a simple technology roadmap6. More selected partner offers all of the capabilities that your business requires.specific roadmaps are available from a variety of sources, see belowfor more information.7 Following are some questions to ask when choosing a mobile or in-branch wireless application solution partner.Figure 1 - Generic Road Map Applications • re applications available from the industry’s leading software vendors? AMarket Initiative 1 Initiative 2 • re the applications scaled to accommodate small, medium and A large implementations?Product Product 1 Product 2 Product 3 • re the applications designed to meet the needs of your A Tech 2 specific market?Technology Tech 1 Tech 3 • ave the applications been successfully implemented in similar HRD Program Prog 1 Prog 2 Prog 3 financial environments? • o the applications provide the reporting features and business DResources Finance intelligence your company requires? Supply Chain • an applications be easily integrated with existing business C Staff/Skills applications, security and compliance programs (for example: Payment, cash management, Customer Relationship Management (CRM), business intelligence (BI), branch management, asset Time management, loan management, risk management)?
7. Using Mobility to Transform the Financial Services Experience__________________________________________________________________________________ 7Wireless Devices Step 5: Implement the Experience • re applications available for a wide variety of phones, smartphones, A Reaching and interacting with customers through mobility is an tablets, and netbooks utilizing a variety of operating systems? exciting and robust way to attract and retain customers and transform their experience. If the move to mobility is not a smooth one however, • o the applications take advantage of the latest features and D customers might become frustrated and adoption rates could suffer. wireless device functionality? As a result, the mobile channel might never reach its full potential for helping your institution build brand and extend market reach. Many financial institutions have already made this transition smoothly ATT Strategy and efficiently. However, to ensure that your institution’s move to mobile Professional Services applications is successful, we offer the following recommendations. • esign, integration, deployment D • nexpensive solutions can turn into expensive ones. Implement I Software the solution that meets your needs today and in the future. The • re-packaged and custom applications P solution needs to adapt as your company changes. Although purchasing the low cost service might be appealing right now, you, Multiple Platforms your institution and your employees may regret that choice as • eveloper tools, support services D your company grows and needs change. Migrating from a low cost choice to a more robust service will result in upgrades and changes Network to applications and alterations to business processes put in place • ata transport D for the initial solution. That means more cost down the road as well Custom Devices as losses in productivity, and unhappy customers and employees. • urpose built devices P • nderstand the capabilities and characteristics of the applications U and how they work with end user devices before they are used in the implementation. Devices vary by user interface, operating system, battery life, speed, size, weight, screen size, resolution, cost,Support and Integration and a number of other characteristics. Use the applications that will • an you choose a solution that includes multiple applications C work best for your specific customers and employees –for today supporting a wide variety of devices? and for the next several years. • as the solution provider implemented solutions for other H • nderstand your business intelligence requirements. Tracking U institutions in your market segment? application adoption and use is critical to the growth of your • s there a process to test and certify the performance of the I business and your mobility strategy. Be sure to understand the applications on the network? On a variety of devices? information you’ll need from your mobile applications to help you meet the needs of your customers as they adopt and adapt to a • ave similar solutions been implemented with similar scale H mobile environment. (number of end user devices)? • nsure your customers and employees understand the benefits E • s there a single bill for all service components (applications, I of mobile applications. How will the service get information more wireless network)? quickly? Speed the loan approval or claims process? Help them save money or invest more wisely? • re systems integration services available to help link the location A based application with existing security, compliance, CRM or other • nderstand the implementation process. What will you or your U existing business applications? staff need to do to integrate with existing applications? Security systems? Compliance reporting systems? How large are the • s user training included? How is it delivered? I applications that customers will download onto their smartphones? • ow is the solution supported after the sale? H What is the software upgrade process for customers? Is there a registration or activation process for customer devices? • How are software or hardware upgrades implemented? • nsure that every employee attends training. If the mobile ENow that you are armed with questions to help you choose a mobile application requires a new skill set or performance of a specificor in-branch wireless application partner, the next step is to ensure process, ensure that every affected employee attends training.that your company’s implementation will be smooth and that anypossible “gotchas” are avoided. Taking the time up front to plan By following these simple, yet important recommendations,how your application is implemented ensures that your institution companies can ensure that their location based mobile applicationwill realize the benefits of your mobile applications faster, and that implementation will be a success.customers will adopt them more quickly