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Digital banking: entering the new mobile ecosystem

The mobile handset is fast becoming the single point of interaction between banks and their customers. Mobile is facilitating customer self-service, building brand awareness, driving innovation and building a revolutionary business model.

However, few traditional financial services institutions are treating it as something other than a basic extension of existing offerings. Banks that have not yet set out a robust mobile strategy are missing a significant opportunity and risk losing market share and productivity gains.

The strategy needs to take advantage of the new money that is flowing through mobile channels, which is creating an ecosystem, bringing network operators, handset manufacturers and application providers into the closed world of financial services. New entrants are helping consumers use their mobile device to meet virtually all their financial needs without visiting a branch. Where financial institutions are slow to react, non-traditional players can position themselves as the ‘new bank’, and are already gaining market share.

Using the phone for payments is a natural extension of the phone’s ubiquity and a variety of solutions are emerging. SMS-based peer-to-peer payments and cross-border remittances are booming in places like the Philippines and Kenya. These relatively simple offerings have converted untapped segments into users of financial services and will become increasingly widespread, driving the next wave of mobile services.

The growing number of financial aggregators is able to commoditise traditional services, from transaction histories to air miles, by inserting them into established value chains. Banks must, like aggregators, understand consumer desire for omnipresent services, recognising that mobile enables deeper relationships, and a personalised service that reflects changing lifestyles. 

Our experience working with global financial services firms indicates that the opportunity from mobile can reach billions of dollars. Given the relatively low implementation costs of mobile, the return on investment is often very straightforward. Those that do embrace the power of mobile will gain a greater chance of remaining relevant, innovative and profitable.

To learn more about PA Consulting Group's approach to mobile strategy or request our paper on the growing mobile ecosystem in financial services, please contact us now.

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David Troman
Financial Services
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Reiar Ness
Financial Services
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