Mobile Wallets, Identity Security and Banking Digital Maturity

My iPhone is the least valuable thing I carry. I like it that way – William Lovegrove on e-Consultancy

… having been through this recently myself I would concur… my iphone5 had a security flaw in it that meant it could be unlocked, you hardly ever recover a stolen iphone because once the sim is out it’s untrackable and the identity theft risk is very tangible in a society that is ‘risk-innocent’ and not protecting itself appropriately. 

It’s a race between a ‘few’ people who are looking at device security and a tipping point of security issues that wake people up to the risks…  that tipping point will get closer once banks implement mobile wallets – the device will be a much bigger target.
I’ve been involved with or around a few Mobile Banking strategies for UK banks over the last few years.  Banks are very keen to get in on the mobile wallet space and get ahead of Google, PayPal, Apple etc.  However banks are not traditionally innovators, certainly in technology.  They have been slow to wake up to the realisation that MOST companies now are enabled by technology (even in somecase have become primarily technology companies).  No one was really discussing the issues highlighted in this article (some did but were cut down because ‘we have to be in on this’)
My experience is that the Banks, whilst rushing to develop cool mobile strategies that ‘position’ them for innovation and marketshare, are absolutely not going far enough in considering the wider impacts of this technology.  Many have a good intent with making things easier for customers and increasing customer engagement.   However if you are involved in enabling a technology to become so intrinsically more intimate (yes finances are intimate) and thereby also making us a target for crime without considering how to mitigate this then you are not really making it better for us.
Here’s what I need (with this particular subject lense on)
  1. Give me somewhere safe to put my money
  2. Make it easy for me to access (unless I want to lock it away in exchange for some upside)
Very much in that order!
Fraud departments of Banks need to be ahead of the game here (a lot are using old standards for new channels), technology groups need to be on top of the latest thinking/developments (a lot are outsourcing the development of mobile channels to 3rd parties).
If Banks are going to be truly serious about being involved in mobile payments and wallets there needs to be a step change in how they go about being drivers of technology and innovation – across all operations in the bank.
After my phone loss – I’ve locked my new phone down now, changed all my passwords to a very secure system, backed everything up, removed financial information from the phone, set findmyiphone to track (to no avail), downloaded hiddenapp for future protection, reviewed my mobile phone insurance – that’s all easy enough right?
I mean – EVERYONE does that right?

Shaking up the UK Banking Sector – I’m cautiously optimistic

So Virgin Money are having a showcase week following their acquisition of the ‘good’ Northern Rock.

I am personally very excited about

a) Virgin Money’s ‘full’ entrance to the market
b) The next 5 years of the UK Banking sector

Virgin have been hankering after the opportunity to transform this industry for a long time now and they stand a very good chance of being able to do so… but they are not the only change shifters around and they are not ‘automatically’ going to be THE people to change the industry necessarily!

What IS wrong with UK Banking?
When bankers or those in the industry survey customers about their opinions about banking we get answers back about interest rates, charges and fat-cats.

What we don’t get is what are people trying to do with their money (that means they want better interest rates), how are people managing their money (such that they incur charges) and what do people understand about the banking industry such that they perceive ‘Fat Cats’ as being unfairly paid…

The banking industry is just generally not used to being customer-centred in it’s thinking. It has never had to be.

Well that is certainly changing now. Rightly or wrongly the banking crisis has made us all say “Enough is enough… something has to change” and there are now new entrants to the industry who are clamouring to offer us alternatives in an industry numbed by sameness.

When I look at the new entrants the ones that excite me are the ones that I know are thinking about us as human beings (and yes consumers), our lives and what we want to achieve ‘through’ banking – as opposed to those who are just thinking ‘what is a better banking product’ or ‘what does mobile banking mean for a customer’.

The lens of change has to be wider than this.

My pick of ones to watch… and why some obvious names don’t make the list

  • [my out on a limb prediction] – Royal Bank of Scotland
  • [the favourite but with caveats] – Virgin Money
  • [The Industry Usurpers] – Apple/Amazon/Paypal
  • [The Surprising Innovator] – Standard Chartered
  • [The disrupter] – Yodlee

Who didn’t make the list

  • Aggregators/Online ‘layers’ – Bank Simple/Moneydashboard/Mint
  • The incumbants – The other high-street banks

So why is the perpetrator (as defined by the red-tops) top of my list?  Not just because the only way is up ;-) but because

  1. The new starts are struggling with actually implementing the technology behind a bank.  Don’t expect current accounts or mortgages from Tesco Bank anytime soon the FSA is far too busy scrutinising them on why they couldn’t robustly deliver Savings and Credit Cards [their core business]Virgin Money remain on the list because they have at least acquired a fully working bank but they may still have serious integration challenges (based on the same technology Tesco Bank is struggling with)
  2. The incumbants have already got a fully working bank system, are experienced at delivering change into it and rolling that out to their staff.Their challenge is a cultural and organisational one – their key change they need to make is to decide to be more customer centred and do everything they already know how to do – but with THAT focus.  They COULD move very quickly and deliver to their already hefty market share a great experience.

The disruptors may well be the ones that kick one or two of the incumbants into action (the jungle drums of customer experience suggest this is happening within at least three major UK retail banks)

There are so many ways to cut your predictions – and I may well change my mind in a years time – there is one thing that for me remains absolute though.  The winner will be one who works out what it really means to be customer-led from the inside-out, who can demonstrate a genuine sense of connection and understanding with their customers.