How many of these apps have come about often follows this scenario.
One of the banks executives may have been on a silicon valley tour where they have visited the likes of google, apple or one of many other digital native companies or they may have had a great dinner with other bankers who have been boasting about how advanced they are in digital. The next day they haul in one of their trusted executives – possibly the CIO but more likely to be the CMO and challenges them to demonstrate quickly that the bank is serious about digital. This executive in turns calls in one of his team and asks him/her to pull together a task force to create a mobile application. The team leader doesn’t want to be polluted by existing thinking so they create a team of young people who haven’t been at the bank for any length of time, adopt a new dress code to show they are different and work in a separate office away from those who could constrain their thinking. Because they have been told that the bank executive wants something quickly and because they have heard all the cool companies use them they use fail fast, agile/scrum methods to get the app out there. The result is a standalone app that is added to the thousands of other programmes that IT has to support.
As a recent detailed study has shown most of the banking apps out there are not simple to use and provide a poor customer experience, but even if that wasn’t the case the new customer interface is almost exclusively being served by legacy processes and systems.
This was similar to what happened with telephone banking when HSBC first launched First Direct. The customer got to speak over the phone to friendly, helpful and very enthusiastic call centre staff who were using green screen systems that had been designed in the 1960s details, print them out and then have to rekey them into green screen terminals. While First Direct may have been delighting their customers rather than reducing costs it was adding costs to the running of HSBC.
There are three critical business issues that banks across the globe face are regulation, going digital and reducing costs.
The way that most banks are going about mobile banking is paying lip service to digital and increasing short and long term costs and doing nothing to address the regulatory pressures.
Banks that go digital in a coherent and end-to-end way can address all three critical business issues and at the same time grow revenues. What this means is that when addressing their digital solutions they need to:
Redesign the end to end processes – a lot of the costs that banks incur today occur in the back office. By automating the processes not only will significant costs be taken out but the speed and the quality of the customer experience will improve and the compliance to regulation will be far easier to enforce
Design for omnichannel – rather than designing purely for the mobile channel recognise that customers may want to start in the mobile channel and during a process either concurrently or sequentially continue in other channels in a consistent and usable way. For instance they may wish to start a mortgage application on their smartphone, when they have a question launch a webchat, book an appointment online in a branch, have a meeting with a mortgage advisor and finish the application back on their smartphone. They should be able to do all of this with their mortgage application seamlessly progressing across the different channels.
Design for change – just because a process is executed one way today doesn’t mean that changes in the way customers want to do things or in regulation means that that is the way it will always be. Inevitably new technologies will come into common use. Process need to be designed to be able to be adaptable.
Adopt a unified architecture – Many mobile applications have introduced new technologies and software into an over-crowded IT estate. Digital should be used as a catalyst for simplification and rationalisation. By spending time defining the bank architecture costs can be significantly reduced and agility greatly increased.Mobile banking is increasingly important for customers as that is the way that many want to interact with their banks. However quickly getting a mobile banking app out there is not the answer. It is the equivalent of painting lipstick on the pig. Banks that want to be there for the long term for their customers and to retain, grow and engage with their customers while increasing their profits need to adapt a more strategic approach to digital.