When someone tells you they’re going to the Digital Banking Summit, your initial reaction may be to pat them on the shoulder and tell them to stay strong, but they can save those misguided words of reassurance for someone who needs them. Truth be told, this year’s Digital Banking Summit was full of captivating panels that could potentially affect your life even more than Apple’s latest operating systems. While it may not have the prestige of WWDC or the bells and whistles of GLAZEDcon, the Digital Banking Summit focuses on something we can all rally behind …
Although money was at the heart of every discussion, the topics ranged from omnichannel integration to wearable devices and everything in between. Since not everyone could make it to the Hyatt Regency Century Plaza in Los Angeles from June 2nd to 4th, we’ll give you a glimpse at the future of digital banking.
Banks have been been breaking their brick-and-mortar shackles since the dawn of the ATM, and no one is more aware of how far we’ve come than Wells Fargo EVP of Product Management for the Digital Channels Group, Brett Pitts. Pitts kicked off his forty-five minute session by recalling the somewhat chuckle-worthy past of WellsFargo.com, specifically, their decision to place horoscopes on the homepage. Their digital offerings have come a long way since astrological predictions, and it’s all thanks to the customer.
“I have a question, Wells Fargo. What were you thinking?”
Pitts believes customer demand is what’s fueling this widespread digital adoption in the banking sector. Customers want 24/7 self-service and full-service options, convenient cross-channel solutions, and omnichannel investment experiences. If a bank doesn’t have those capabilities, they’ll have a hard time keeping the modern customer’s money in their vaults.
Creating customer-centric omnichannel experiences is an important process. The most important step is making sure opening an account is as frictionless as possible. Wells Fargo’s research shows that the majority of people begin their research online, with a growing number of individuals taking care of the entire sign-up process from their computer.
But the real drivers of innovation are mobile devices. Pitts believes mobile should be at the center of every bank’s product offerings. They provide customers with virtual and full-service functionality, they create 24/7 connectivity, and they are paving the way for cardless transactions. Although 85% of Wells Fargo relationships are currently formed in their physical stores, there’s a good chance those face-to-face interactions will start taking place via teleconference in the not-so-distant future.
Another aspect of banking that can’t be talked about enough is security. As customers continue accessing their financial information from more devices and locations, identity protection has never been more important. Innovations like fingerprint scanners and heart-rate detectors are promising steps in the fight against hackers, but they’re not the final solution.
Andrew Hoog (CEO and Co-Founder of Viaforensics), Christopher Novak (Director of Global Investigative Response at Verizon Communications), and Alphonse Pascual (Senior Analyst of Fraud & Security at Javelin Strategy & Research) believe the answer is a combination of measures. No one solution is full proof. After all, passcodes and biometrics are more for authentication than data protection. Keeping your information safe from hackers is a back-end matter, and according to the speakers, IT is a continual battle.
However, it’s a battle the IT technicians don’t have to fight alone. Customers can help fight the good fight by keeping their authentication methods secure and reporting any suspicious activity immediately. Try as they might, IT technicians can’t see everything that’s taking place on the other side of their firewalls. If you see something fishy with your account, say something.
Smartphones may have sparked the mobile banking craze, but tablets are fueling the widespread adoption. A panel of digital bigwigs from Citi, USAA, Suntrust, and Union Bank sat down with moderator Mary Monahan (EVP and Research Director of Mobile at Javelin Strategy & Research) to discuss how much tablets have altered their business.
According to Raghu Bhat (SVP Director of Digital Strategy, Product Management, and GCT Retail Services at Citi), customers view tablets more like a computer than a smartphone. They do research, check accounts and even apply for credit on the go.
Patrick Kelly (Executive Director of Emerging Channels at USAA), provided helpful statistical insights, claiming billpay via tablets is three times greater than billpay on smartphones. However, customers use smartphones three times more than tablets to initiate fund transfers, suggesting that banks still need to remain hardware agnostic.
Kristen Rankin (Group VP, Mobile Channel Management at Suntrust) agrees that tablets are a complementary device, and should not be expected to fully replace any existing channels. One tactic Suntrust uses to woo new customers are “tablet bars” within branches. Once the potential customer’s attention is grabbed by the tablet, a sales associate swoops in and seals the deal.
Ramon Kurkchubasche (SVP, Head of Digital Channels at Union Bank) had more to say on the platform itself. According to Kurkchubasche, the meat of the app has to be native. There are a handful of one-time-use services that can be done on the mobile web, like account applications, but recurring functions like transfers and bill payments fare much better on native apps. As for which operating system your native app should run on, Kurkchubasche believes iOS users are much more critical than Android users at the moment.
While tablets have successfully proven themselves worthy of a bank’s R&D budget, the question is still up in the air when it comes to wearable devices. According to Miranda Hill (VP and Manager for Digital Innovation Capabilities, Wells Fargo), wearable devices are in a similar position as the early smartphone market. If you recall, there were smartphones before the iPhone, but it took the iPhone to convince the masses that smartphones are far superior to the standard cellphone.
Hill believes the market is still waiting on that revolutionary wearable, but that hasn’t stopped Wells Fargo from experimenting with the technology that’s currently available to their customers. They’ve also been keeping an eye on what other banks are doing. One use case Hill mentioned came from Russia’s Alpha Bank. Their Alpha Activity savings account allows users to get higher interest rates by connecting their fitness tracker to their bank account. As the user becomes healthier, so does their financial situation.
Another major tech innovation that got some love at the Digital Banking Summit was the mobile wallet. There are currently over 100 startups and $2 billion of venture capital dedicated to this space, and it’s only going to get bigger. The market is currently broken up into four categories:
Despite the broad potential for the market, panelists Frank Liddy (VP and General Manager, PAYDIANT), Robert Hedges (Managing Director, ALIX PARTNERS), and Marc Winitz (SVP, MONITISE) believe the financial services sector moves too slow to capture the majority of this market. There seemed to be a shared belief that one big winner will represent 80% of the user base, and it will likely be a nimble startup that isn’t weighed down by the need to run lengthy pilot programs like most banks.
If there’s one thing to be taken away from this three-day event, it’s that the banking and financial industries are bound for a change. With the number of tablet and smartphone users constantly increasing, wearable devices emerging, and even the first entirely digital currency, there’s nothing boring about the Digital Banking Summit of the future of money in the 21st century.
Learn more about mobile devices in the banking industry with the mCommerce Trend Report.