2. Fiserv Executive Briefing Paper
How Mobile is Reshaping Every Banking Channel
Financial institutions have much to
consider when it comes to serving their
customers’ multi-channel banking needs.
The addition and rapid evolution of
mobile banking is impacting the way
consumers are approaching banking
activities. Consumers expect information
to converge and be consistent across
channels. Consumers also expect to
interact and transact differently through
each channel — mobile, online, and
branch — based on the unique attributes
of the access device or location. Financial
institutions that develop an integrated
channel strategy that leverages the
unique opportunities afforded by
each banking channel will be able to
differentiate themselves and provide a
more holistic and satisfying experience
for customers.
As lives become busier, consumers have less time
to stop, sit, and eat a good meal. It’s easier to grab
a quick snack on the way to the next appointment.
Snacking has become a way of life, reshaping how
people eat. The behavior of snacking can describe more
than eating. Many consumers snack when it comes to
other activities like shopping, getting directions or even
banking. Time is precious so consumers look for quick,
easy and convenient ways to check off tasks.
Technology is impacting the ways simple tasks are
completed. When banking, consumers have a choice
of channels to conduct their financial activities and
there are distinct differences in the way they use those
channels. Thanks to technological advancements,
consumers are increasingly interacting with their
financial institutions through virtual channels such as
the Internet and mobile instead of visiting branches.
While the online banking channel is now the dominant
channel for many consumers, the mobile channel has
been growing in popularity. According to the “2011-2012
Mobile Banking Vendor Scorecard” report by Javelin
Strategy & Research, consumer adoption of mobile
banking grew by almost 60 percent from 2010 to 2011.
With the pervasive growth in the mobile channel, many
financial institutions are still working to provide their
customer base with access to mobile financial services.
A prevailing practice among financial institutions is to
offer mobile banking as a second way to access the
same information and capabilities available online.
However, consumer behavior suggests that developing
mobile banking as its own unique channel holds
advantages for financial institutions and customers alike.
3. Figure 1: The Evolution of the Mobile Channel
Source: Fiserv, Inc.
Fiserv Executive Briefing Paper
Keeping Up with Mobile
One only has to look to recent history to see how the
online channel has had a profound impact on the way
consumers interact with pre-existing channels such as
the branch and ATM. For many consumers, the online
channel is now their primary channel for regular banking
activities such as accessing account information,
transferring funds, and paying bills. According to the
“Integrating Delivery Channels for the Future” report by
Synergistics Research Corporation, 62 percent of adults
in the U.S. that have access to the Internet named
online banking as their preferred banking channel.
It is likely that mobile channel popularity will mimic
that of online banking and gain popularity; especially
for those consumers who own a mobile phone but do
not have access to a computer. The mobile channel is
evolving from informational to transactional (see Figure
1). Mobile banking functionality can now facilitate not
only inquiries about balances and ATM locations, but
also support a range of financial transactions inclusive
of check deposit, bill pay, person-to-person payments,
transfers, alerts and payments at the point of sale.
The Banking Channel Mix: Shifts in
Multi-Channel Banking
Multi-channel banking, defined as the use of more
than one channel to conduct banking activities, is
commonplace today and consumers expect to be
able to bank via any channel they desire, whether that
channel is virtual or physical.
There are two key phenomenons that are reshaping
multi-channel banking:
1) Information Convergence: Since consumers access
banking information and transact using multiple
channels they expect information to be accurate,
up-to-date and consistent across all channels, at all
times. This means that when a consumer walks into
a branch to make a deposit, they expect that they can
go to any other banking channel – ATM, IVR, online
and mobile – to check the balance and confirm that
the deposit has processed.
2) Interaction Specialization: There are reasons why
consumers use different devices or channels
to access their financial information and make
transactions. Consumer preferences for conducting
primary banking activities in a particular channel are
influenced by the unique attributes of that channel.
For simple, day-to-day needs, consumers are apt
to prefer the self-service digital channels of mobile
and online. For more involved needs, like opening an
investment account, consumers turn to the branch
channel where activities can be conducted in-person.
Simple tasks such as balance inquiries and transaction
history confirmations still dominate channels such as
IVR, online and contact centers. These tasks are well
suited to the mobile channel and Fiserv predicts that
as mobile banking becomes more widespread more of
these simple activities will shift to the mobile channel.
1
4. Source: Consumer Trends Survey, Fiserv, Inc., 2011
Figure 2: “Listed below are some possible reasons why you use
mobile banking. Please select all that apply to you.”
Consumers also want to take advantage of what
is unique about the mobile channel and leverage
mobile capabilities that aren’t available through other
channels. For example, among end-users of Fiserv
mobile applications, over 80 percent of the ATM/Branch
searches they conducted relied on GPS technology.
Fiserv Executive Briefing Paper
Similarly, over 20 percent of app users with access to
remote deposit capture (RDC) capabilities used their
smartphone cameras to capture images of checks to
make deposits. In addition, consumers want to benefit
from the geo-location capabilities of the technology to
receive coupons and offers for favorite brands, nearby
businesses and at the point of sale; this also creates
additional revenue opportunities for financial institutions
since customers will likely increase spend on their debit
and credit cards.
Along with the unique attributes the channel offers to
consumers, supporting mobile banking creates unique
challenges for financial institutions:
• Infrastructure: As more consumers use mobile
banking to transact more often, financial institutions
may need to scale-up their infrastructures.
• Display size: Financial institutions need to design
for the smaller screen displays on smartphones to
facilitate not only transactions but also cross selling to
drive additional revenue. It is important that financial
institutions remember that consumers will use the
mobile channel differently and may not require access
to the level of detail they have online from a personal
computer. By studying consumer behavior and using
that information as a guide, financial institutions will
be positioned to decide the appropriate level of detail
and functionality to deliver to customers via the
mobile banking channel.
• Proliferation of handsets and new devices: There
are many makes and models of smartphones and
operating systems. Financial institutions have to
support what is out there now and be prepared to
support hot new models and systems. In addition to
smartphones, tablets also require financial institutions
to determine how to deliver an appropriate banking
experience to consumers that will drive usage and
safeguard satisfaction.
Snacking, Lunching and Fine Dining
The unique interactions taking place in the three primary
banking channels can be characterized as snacking,
lunching and fine dining.
Snacking – Mobile Channel
Like snacking, the mobile channel lends itself to quick
banking interactions. Typically, these interactions
involve transactions that take less than 60 seconds
to accomplish, or have a sense of urgency, such as
checking balances, looking at an alert and paying a bill
at the last minute. When consumers were asked to list
the reasons why they use mobile banking, the top two
reasons related to accessibility and convenience (see
Figure 2).
2
5. Fiserv Executive Briefing Paper
Fine Dining – Branch
The in-person channel of the branch and to some
extent the contact center, offers a full menu of
services and is well-suited for activities where personal
interaction is preferred. These types of activities include
wealth management and other advisory services
that require consultation. Such consultative activities
typically occur infrequently, like fine dining that occurs
on special occasions and involves considerable
interaction and conversation.
As the online and mobile channels continue to evolve
and offer more rich functionality, the role of the branch
will shift. While the in-person channel serves a unique
purpose, mobile will begin to enhance interactions at
the branch. For example, some financial institutions
are giving bank associates tablets to use in engaging
customers at the branch. Other financial institutions may
decide to adopt the branch concept of Virgin Money in
the UK where they will have no transactional capability
in their branches, but still give their customers a unique,
personalized experience that continues to build a
relationship with the customer (see sidebar: “Virgin
Money: Bank Branch of the Future?”).
The future of the branch is to provide the personal
touch and chance to discuss financial matters and make
financial matters more palatable, almost like having
dinner with your banker.
• Security: Forty-one percent of those surveyed in the
2011 Fiserv Consumer Trends Survey cited, “concern
about the security of financial information” as a
reason they do not use mobile banking. Financial
institutions must not only ensure the highest levels
of mobile banking security, via SSL, encryption, and
other technological measures, but also provide end-
user education about best practices for keeping their
financial information safe across channels such as the
importance of customers locking their phones and
using strong passwords.
Mobile banking must stay true to its value proposition of
accessibility and convenience. No matter how complex
a task may be for the financial institution on the back
end, it is essential that the consumer’s mobile banking
experience be simple and snackable.
Lunching – Online Channel
Interactions via the online channel are usually more
structured and routine versus the quick and ad-hoc
transactions that tend to occur on the mobile channel.
This makes the online channel more analogous to
sitting down to eat lunch. This is because the online
channel is well-suited for more in-depth self-service
activities. Weekly or monthly banking activities such
as managing budgets/finances, turning off paper
statements and managing finances tend to be
conducted via the online channel.
Mobile will not replace the online channel, but it will
change how it is used. As more and more consumers
adopt mobile banking, they will no longer see a need
to wait until they are near a personal computer for
quick and simple interactions. Done right, the online
channel will make consumers want to “do lunch” with
their finances.
3
6. Fiserv Executive Briefing Paper
This back office integration will enable banking
institutions to be a one-stop shop where consumers can
research products, make financial transactions, pay bills,
manage finances and receive customer service and
support easily across banking channels. This strategy
will help financial institutions reduce overall expenses
by enhancing self-servicing capabilities and promoting
the shift to direct channels. Financial institutions can
reduce the volume of snacking transactions – balance
inquiries, account information updates and other simple
tasks – within higher-cost channels by ensuring that
lower-cost consumer-direct channels are able to handle
the requests.
To design a consistent, integrated and tailored user
experience for each channel, financial institutions should
employ three principles:
• Know your customer: Financial institutions possess
information about their customers and how they
conduct their financial activities for each channel.
The key is to utilize this data to optimize channels to
support consumer habits and preferences.
• Know your channel: Consumers expect information
across channels to be consistent, however, they
do not always expect the same amount of detail
across channels. Financial institutions must determine
how much information should be available to
consumers in each channel. For example, account
summary information may be adequate for the mobile
channel, but more detailed information should be
available online.
• Know your systems: Delivering consistent information
across channels requires back-end integration and
real-time functionalities. Financial institutions must
determine how they will achieve integration on the
back-end while also enabling consistency on the
consumer-facing front-end.
Creating the Optimum Multi-Channel User
Experience Benefits the Balance Sheet
To optimize the multi-channel experience inclusive of
mobile banking, financial institutions must leverage
an infrastructure that integrates information across
all channels. To achieve this goal, financial institutions
must be able to integrate core systems with various
channels easily and efficiently. Financial institutions can
drive efficiency by sharing information and processes
across the bank and aligning systems across channels.
For example, all banking channels should pull from one
common customer data repository which would reduce
data duplication.
Virgin Money: Bank Branch of the Future?
Founded in 1995, Virgin Money is a UK-based bank and
financial services company owned by the Virgin Group.
Operating primarily as an online bank, Virgin Money
did not have a branch network for many years. Recently,
Virgin Money decided it would launch lounge-style
branches in order to strengthen relationships with
its customers.
As reported in the Manchester Evening News, “Ahead
of a full branch roll-out, we want our customers to
experience Virgin Money in a physical sense,” stated a
Virgin Money Spokesperson. “The lounges are one way
of bringing the Virgin Money brand to life for our
customers – given we have been online and over the
phone so far to date.”
While in the lounge-style branches, customers can check
emails, have coffee and refreshments as well as watch
television. They can also have a conversation with a
banking specialist via video-conferencing – if you will, a
virtual intimate dinner.
4
7. Fiserv Executive Briefing Paper
Offering Personal Financial Management
Tools Online
With many consumers now using the online channel
as their primary banking channel, financial institutions
should enhance the functionality of the user interface
to make it easier for consumers to effectively manage
all of their finances. Financial institutions need to make
sure their online banking experience supports
structured interactions. Financial institutions can
enrich the consumer experience with online banking
by offering planning, budgeting and personal financial
management tools.
Focusing on Consultation in the Branches
Financial institutions should embrace the shift in the
role of the branch from transactional to consultative.
Consumers will continue to value their branch
experience if they are able to go there and receive
high-quality personal advice that improves their financial
well-being. Bank employees play a significant role in the
success of a financial institution’s integrated channel
strategy. They will need to buy into the change and
support both consumers and the organization through
the change. Financial institutions will need to train
their staff on the use case for each channel so the
staff can assist consumers in “right-channeling” their
interactions. This will increase the engagement and
retention of staff and customers alike.
Although channel use is shifting and changing,
customers will continue to consume banking services
like they eat: by snacking, lunching and fine dining.
By creating an integrated multi-channel mix, financial
institutions will be sure to satisfy the hunger for
banking services across all channels and make
interactions more appetizing.
Understanding customers, channels and systems and
integrating access to information will provide consumers
with experiences that meet expectations across all
tasks and access methods.
Holistic Multi-channel Execution Inoculates Against
Non-Bank Competition
Many non-banks are offering new and innovative
applications that promote a range of new transaction
options via the mobile channel. Non-banks, like Google
and PayPal, are pushing forward with mobile payments
while financial institutions are lagging behind, as
are content aggregators like Mint and PageOnce.
Financial institutions should not discount the potential
competition from non-banks that threaten to disrupt the
relationships they have with their customers. If financial
institutions do not step up to the plate and provide
their customers with a complete banking experience,
including mobile payments, they could stand to lose a
part of their customer base to non-banks.
Snacking, Lunching and Fine Dining:
SatisfyingYour Customers’ Appetites
Financial institutions can make certain they are feeding
their customers with right-sized banking channel
experiences by:
Deploying Mobile Banking and
Payments Capabilities
Consumers want to quickly and easily take care of
routine and urgent business on their mobile devices.
This requires rolling out balance inquiries, ATM finders,
mobile alerts, transfers, bill pay, person-to-person
payments, and remote deposit capture of checks.
It also requires developing a strategy for near-field
communications and point-of-sale payments as the
industry evolves.
5
8. About Fiserv
Fiserv is driving innovation in Payments, Processing Services,
Risk Compliance, Customer Channel Management and
Insights Optimization, and leading the transformation of
financial services technology to help our clients change the
way financial services are delivered. Visit www.fiserv.com for
a look at what’s next, right now.
