Mobile apps for consumer finance in banking are increasingly crucial as customers expect mobility as a matter of course; such apps can help cut costs, improve branding and customer loyalty and heighten efficiency.

1. • Cognizant 20-20 Insights
Leveraging Mobility in Consumer Finance
Banks that deploy mobility solutions effectively can not only reduce
staff workload but, more importantly, improve lead generation and
conversion as well as the market perception of their brand. The result
is increased sales and long-lasting relationships with customers
Executive Summary office, middle-office and back-office workload,
cross-sell and up-sell products, deepen relation-
Mobile technology is increasingly making its
ships and increase stickiness.
presence felt across the banking sector. In terms
of revenue, the mobile banking market is growing This paper focuses on the trends in, and the
at a compound annual growth rate (CAGR) of use of, mobile banking in the consumer finance
more than 35%1 (more than four times faster than space and the typical challenges in implement-
the overall banking market) and is expected to ing a mobility solution. It proposes a high-level
reach $670 billion by 2015.2 The spread of smart approach to build a roadmap for implementing a
phones, which offer several unique advantages mobility solution.
such as portability, anywhere anytime accessibil-
ity, size, unique id and geo-positioning ability, is Consumer Finance: Standard and
driving banks to offer mobile features. Banks are Emerging Mobility Offerings
beginning to realize that this is a permanent shift
We analyzed and mapped the mobility offerings
in consumer communication and transactions,
of the top banks and lenders in the consumer
and therefore not having a mobility app today is
finance space across the process life cycle and
akin to what it was not to have a Web site in the
noted some trends (see Figure 1):
early 2000s.
Most banks, however, are still trying to get their • Sales and promotion: Most lenders offer
standard sales and promotion features such
arms around what this means for them, how
as rate and payment calculators, product
the larger banking sector is reacting or will
comparison summary, product details, branch/
react and what they should be doing. Based on
dealer locator, etc. These features help pro-
our experience of working with banks and the
spective customers explore product options,
mobility workshops we have conducted, we think
the corresponding monthly obligations,
most banks understand that mobility has the
tenures, interest rates, down payments, etc.
potential to revolutionize customer experience
Some lenders offer emerging features such as
in the consumer finance space. However, this
integrating borrower registration with the basic
realization is not reflected in their strategizing.
features mentioned above to maintain a record
Banks can offer a range of features over mobile
for each borrower, which in turn facilitates
to enhance customer experience, reduce front-
cognizant 20-20 insights | november 2012

2. lead conversion. Other emerging/advanced Benefits for Banks and Customers
features include guides to buying properties
For banks, the benefits of mobility include cost
and vehicles, guides to student loan programs,
savings through reducing workload across the
providing property listings in the customer’s
front, middle and back office, improved lead man-
area of choice, etc.
agement and pull-through and brand/perception
building. The front-office workload is reduced
• Application through fulfillment: Mobility fea- through improved lead management and conver-
tures offered in this space have mostly been
limited to sending alerts for key loan status sion, and borrower registration through mobile. The
updates or reminders, as this is a middle-/ middle-office workload is reduced through mobile
back-office-focused activity for banks. How- status updates and document management. The
ever, some lenders provide advanced features back-office workload is reduced through automated
such as checklists for documents to be submit- alerts, borrower updates and account views. Push
ted, the ability to upload documents through alerts and modification of borrower demographics
image capture (similar to check deposit), the via mobile apps help the bank communicate with
ability to lock rates through mobile apps and customers regularly and reduce the call volumes
push alerts for document verification status to the back office. Payment reminders help reduce
changes. defaults by careless borrowers and save down-
stream collection efforts. These features not only
• Loan servicing: Standard features in the loan provide operational efficiency but also help build
servicing/administration space include balance the brand. They improve brand perception by pro-
information, due date reminders, auto-pay notifi- moting transparency and attracting customers
cations and account views. These basic features through features that are intuitive and user-friendly
offer customers convenience and mobility while such as calculators, product comparisons, etc.
helping lenders reduce outbound and inbound
call volumes, reduce downstream collection Customers benefit through improved, effective
efforts and promote transparency. Advanced and timely communication, easy access to infor-
features that some lenders offer include rate mation on products, rates, homes, dealers and
reset/payment change alerts and the ability to loan programs “anywhere — anytime.” They can
change basic demographic information. view loan terms and lock rates on the go with zero
latency.
Consumer Finance: Standard and Emerging Mobility Offerings
• Basic borrower demographic
• Application document checklist. info amendments.
• Rate lock. • Alerts for rate reset and
• SMS triggers on document payments (SMS).
• Borrower registration. verifications and status changes. • Investor reporting alerts.
• Guide to buying • Document snapshot and upload.
property/vehicles.
• Guides for student
loan programs. • Due date reminders (SMS).
Emerging • Balance information.
• Alerts for major loan
Features • Rate & payment calculators. status updates (SMS). • Fund transfer to loan accounts.
• Approval and disbursement • Other reminders (SMS).
• Product comparison.
notifications (SMS). • Mobile banking — account
• Offers and product details.
views, payments.
Standard • Interactive — branch, loan
Features officer, dealer locator.
Application Through Loan Administration/
Process Value Chain Sales and Promotion
Fulfillment Servicing
Benefits • Anytime-anywhere access • Borrower gets upfront idea • Reduced middle office involvement.
to relevant information — of required documents. • Reduced missed payments and delays
products, comparison, • Check loan terms on the move. and call volumes for reminders.
locators, etc. • Quick turnaround on rate lock. • Reduced collection effort downstream.
• Reduced call volumes on • On-the-move outstanding balance.
status checks. • On-the-move payments and reduced
• Keeps borrower engaged with call volume for payments.
status of documents verification. • Reduced back office involvement
• Promotes transparency. for payments.
Figure 1
cognizant 20-20 insights 2

3. Benefits of Offering Mobility Features
Cost savings by • Reduced workload on front office through leads, registration and
reduced workload product/offer comparison.
across front, middle • Reduced workload on middle office for status updates and document management.
and back office • Reduced workload on back office through payments, updates and document publishing.
Improve lead • Better lead to application routing and management.
management and • Real-time help to borrowers.
pull-through
• Customer attraction: User-friendly interface enables borrowers to
Brand/perception perform various functions.
building • Promotes transparency through various features such as product comparisons
and application, document verification status, etc.
Figure 2
Challenges in Mobility Adoption addressed through technological solutions such
as data encryption and digital signatures, other
The typical challenges associated with mobility
features such as PIN authentication and session
adoption include security concerns, standardiza-
timeouts can address concerns over loss/theft of
tion and interoperability challenges, usability,
mobile devices. Interoperability across platforms,
device strategy and securing business buy-in (see
in the event the user changes mobile device, can
Figure 3). Security challenges include security of
be addressed by offering apps across the three
data exchange, login and guarding against virus/
most widely used platforms (iPhone, Blackberry
hacking attacks. While security concerns are easily
Challenges of Implementing Mobility
• Data access, integrity and confidentiality.
Security • Authentication and non-repudiation – ensuring source authenticity.
• Protection from cloning, hijacking, malicious codes.
• Interoperability issues: lack of standards across platforms and carriers.
Standardization
• Multiple fragmented versions offered by different stakeholders.
and Interoperability
• Different standards and technologies across the organization.
• Lack of simplicity impeding user acceptance.
• Unfavorable user experience: small screen size, keypad and slow network speeds.
Usability
• Lack of universal acceptance of mobile payments at POS.
• Multichannel integration.
• Device-agnostic vs. device-specific approach.
Device Strategy • Manage platform diversity.
and Deployment • Mobile Web, hybrid and native apps.
• Clarity on roadmap and approach.
Business Buy-in • ROI difficult to calculate and quantify.
• Long-term investment.
Figure 3
cognizant 20-20 insights 3

4. and Android). Usability in terms of user interface and payment calculator and some alert features
and flow, as well as acceptance, for example of rather than embracing a full feature set or
mobile payments, is another challenge that can adding advanced features. Needless to say, such
be mitigated by providing an easy-to-use, intuitive an initiative requires considerable budget and
app that requires minimal data entry and text. resource allocation to achieve the desired impact.
Mobility benefits usually accrue over a period of Implementation Approach
time and can be difficult to quantify. Therefore Defining the mobility implementation roadmap
the biggest challenge for mobility adoption is should include identification of a complete list of
securing buy-in from the business. Even if the consumer finance features, determination of the
business is willing to invest in a mobility solution, business impact of each feature and estimation
the larger organization usually lacks the expertise of the corresponding implementation cost to help
to lay out a comprehensive mobility solution decision-makers prioritize the features that are to
roadmap that includes the proposed features, be implemented.
technology, implementation plan, etc.
The complete list of features should include
Roadmap for Mobility features across all process areas, with details
While defining the roadmap to implement various about what each will offer to the customer as
mobility features, it becomes all too easy for well as the corresponding benefits to the bank.
banks to lose their way given all the possible Determination of the business impact of the
features they can offer. A structured and com- feature will be based on its potential benefits, the
prehensive approach is required to lay out a competitive landscape, the business model and
well-defined and definitive roadmap that takes business drivers. An estimation of the implemen-
into account the bank’s internal resource and tation effort should take into account the existing
budgetary constraints, the technology and com- technology landscape, the current features and
petitive landscapes, the current features offered, their complexity. The final step in the process will
the complexity of the proposed features as well be prioritization of the proposed features based
as the features offered by competitors, the on business impact, implementation cost and the
potential impact on the business and the business internal resource and budgetary constraints.
drivers. For example, a lender that originates
The implementation prioritization depends on
loans primarily through retail channels would
the trade-off between business impact and imple-
require very different features compared with
mentation effort. The easy wins are obviously
one that originates through wholesale channels.
those with high impact and low implementation
An analysis of the bank’s current offerings is
effort. The next set would require deeper thinking
necessary to understand the bank’s maturity
by management, after considering the potential
in terms of mobility. A bank with a very basic
business benefits and the budgets available.
mobility presence (only products and interest
rates) might choose to implement just a basic rate
An Implementation Blueprint
Determine Determine Determine Prioritize based
complete business impact technology on business
list of features based on the choice and impact and
that can be importance in the implementation effort
offered process effort
Figure 4
cognizant 20-20 insights 4

5. Conclusion tion is willing to invest in a mobility solution, it
may lack the expertise to lay out a comprehen-
By leveraging mobility effectively, banks can offer
sive mobility solution roadmap that includes the
features that provide anytime-anywhere banking
proposed features, technology, implementation
to their retail customers, thereby ensuring
plan, etc.
positive user experiences and thus increasing
customer satisfaction and loyalty. Further, banks Some of the challenges that can be mitigated
can use mobile channels to increase their sales by working with an expert technology partner
and marketing capabilities and reduce the include security concerns, standardization and
workload on their front, middle and back office. interoperability, usability, device strategy and
Mobility features that can enable the above range securing business buy-in.
from standard features such as rate and payment
calculators, product comparisons, branch/dealer A long-term mobility plan requires consider-
locator and loan status updates to advanced able budget and resource allocation to achieve
features such as guides to buying properties and the desired impact. Banks need to put together
vehicles, student loan program guides, property a definitive roadmap after considering their
listings in the customer’s area of choice, document internal resource constraints and budgetary
checklists and document approval status updates. constraints, the technology and competitive
The benefits of mobility include cost savings from landscape, current mobility features being
reduced workload, improved lead management offered, complexity of the proposed features,
and pull-through and improved brand perception. business impact and business drivers.
Delivering all these features does not come However, the potential rewards in the form
without its own set of challenges. The biggest of improved lead generation and conversion,
challenge is securing internal buy-in and improved market perception and brand strength
preparing the business case so that the various and reduced workload are well worth the effort.
stakeholders within the organization can come Moreover, mobility is no longer a choice but an
together and invest in mobility as a communica- imperative!
tion channel of the future. Even if an organiza-
Footnotes
1
http://www.temenos.com/news-and-events/news/2011/temenos-announces-first-go-live-with-arc-mobile-
its-new-solution-to-address-the-rapidly-growing-mobile-banking-market/.
2
http://juniperresearch.com/viewpressrelease.php?pr=250.
About the Authors
Ashish Shreni is a Principal Consultant with Cognizant Business Consulting and has worked for over
13 years in the banking and insurance space on projects spanning business and IT strategy, business
process optimization and complex project execution. His core focus area is consumer finance. He can be
reached at Ashish.Shreni@cognizant.com.
Sanjit Bose is a Consulting Manager with Cognizant Business Consulting. He has over nine years of
experience working with leading banks in project management, business process optimization and
consulting engagements. He can be reached at Sanjit.Bose@cognizant.com.
About Cognizant’s Consumer Finance Practice
Cognizant’s Consumer Finance Practice employs over 70 subject matter experts and analysts and
5,000-plus associates, and has successfully delivered over 500 large and complex engagements across
originations, secondary markets, servicing and loss mitigation in the U.S. and UK and throughout
Europe. We offer consulting, IT, BPO and IT infrastructure services across all functional areas. Consumer
Finance Mobility Strategy is an offering designed and developed by Cognizant to help lenders define and
implement mobility solutions for consumer finance LOBs.
cognizant 20-20 insights 5

6. About Cognizant
Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process out-
sourcing services, dedicated to helping the world’s leading companies build stronger businesses. Headquartered in
Teaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep industry
and business process expertise, and a global, collaborative workforce that embodies the future of work. With over 50
delivery centers worldwide and approximately 150,400 employees as of September 30, 2012, Cognizant is a member of
the NASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among the top performing
and fastest growing companies in the world. Visit us online at www.cognizant.com or follow us on Twitter: Cognizant.
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