By Mike Russo
A lot of people are talking about the merits of taking a “mobile-first” approach to financial application delivery. With the ever-increasing adoption of smartphones and the rapid proliferation of popular mobile apps, focusing on the mobile market is a no brainer. Worldwide, 1.2 billion people regularly access the web from their smartphones. IDC’s 2012 Worldwide Mobile Worker Population 2011-2015 Forecast projects that 37.5 percent of the entire workforce will be qualified as mobile workers by 2015.
In its June 2011 Mobile Money Forecast, Yankee Group predicted that the value of global mobile transactions will grow from $241 billion in 2011 to more than $1 trillion by 2015, for a CAGR of 56 percent! That growth, coupled with their estimated 500 million mobile banking users around the world in the same time frame, presents an enormous opportunity for both new and established players in the mobile money ecosystem. In addition to the increased number of mobile users and devices, user sophistication and expectations are growing by leaps and bounds. In the near future, mobile access may very well become the only way many of your customers will connect with you. It is in this context that the healthy debate is now raging about the merits of orienting resources towards catering to mostly a mobile use case. Enter the mobile-first approach.
Lately the concept of mobile-first has been spreading like wildfire and there has been a lot interest in understanding the implications of that type of approach. I would like to provide my own interpretation and add to the dialog.
Rather than explicitly interpreting mobile-first as an all or nothing approach, I prefer to look at it as a means to integrate mobile solutions into your business plan from day one, not as a secondary consideration. I view mobile-first as a business model, rather than an application model. To derive maximum value from your development efforts, you need to design your apps and services with multiple delivery channels in mind – and mobile delivery should be right there at the very top of your priority list.
While mobile should always be at the forefront of your development plans, should it also be the first platform deployed? It depends. Financial services transactions are by nature very intricate. They rely on access to large back-end databases and multiple levels of functionality to authenticate, process, and record the customer’s transactions. So in order to provide the functionality needed behind the mobile service, you may need to first build out the required internal services first, which may have nothing to do with mobility.
Breaking new ground with mobility
The earliest financial mobile transactions were built on top of existing internal platforms. Development teams would then leverage the internal services to create similar transactions suitable for mobile devices. Existing user interface designs were modified to fit the smaller screen formats, and mouse clicks and scrolling were replaced by the pinch and zoom functionality of the mobile devices. But the resulting mobile apps operated pretty much the same as they did on the client’s PC, with slightly (or sometimes vastly) reduced functionality. The end result was a mobile look-alike of the online transaction.
Mobile delivery has now evolved to the next level – where entirely new transaction services are being created that go far beyond the capabilities of the existing Web applications. Most of these apps still rely on the legacy backend systems to operate, but they are providing the mobile user with new capabilities not available on traditional devices. Remote deposit capture (RDC) of check images is a classic example of leveraging the embedded capabilities of a mobile device.
The powerful processing capabilities of mobile smart devices, along with their new sensors and components, are now greatly extending the possibilities for mobile apps. And with the integration of social media data and other forms of user interaction, we are now seeing a new breed of innovative services. Consider, for example, a fraud detection application which could be offered to mobile users who have location-awareness functionality on their smartphones. With this capability, the financial institution could automatically match your current location to the location of the credit transaction, send a proactive alert asking for validation, and avoid any embarrassing disruption in card usage.
Mobile services as a subset of a greater entity
There are many simple financial functions that your customers can now do in real-time, wherever they are, via their smartphones. They can perform all of the traditional banking services you would expect, and still perform more sophisticated transactions like remote deposit capture of check images. But even though these mobile transactions themselves are direct in nature, they still must tie back into the enterprise’s much larger services platform.
Therefore, not every financial service is suited for mobility. It is best to initially focus on the more direct services that your users need regularly, not complex in-depth transactions or ones used infrequently. These more complex types of services - at least for the time being - still belong in the larger realm of the traditional model.
The key is to take a “customer-first” approach
To attract new business and retain existing clients, financial companies will need to provide mobile customers with new and innovative services. A mobile-first approach business model should only be adopted when it best meets the needs of their client base. The most successful organizations will be the ones that take the steps to know their customers, by continuously evaluating and understanding their preference and usage patterns, and harmoniously integrating their findings into new apps and services.
Capturing precious data points will enable you to respond with agility and build or enhance innovative solutions that will be highly adopted because they will provide maximum value to your customers and match their lifestyle. At the end of the day, it’s all about the customer, their needs and pain points.
Now if you do determine that mobility is the appropriate response, how do you put in place best-in-class functionality, superior performance, unyielding security, and ease-of-use to exceed your customers’ expectations? I will soon share my thoughts on how to develop and deploy successful mobile financial applications.
Click here to join my Webcast on October 11th where I will discuss this topic further and will field your questions in a Q&A session.
Mike Russo is chief technology officer for HP Software’s financial services and insurance vertical.
Contact name: Mike Russo
Phone: +1 530 676 3549