Look at what is happening in the demand for online services across a spectrum of users and consider what those users are doing.
" Customers are forced by their banks into desktop banking for things like making a transfer above a certain amount or when wanting to download statement data."
Leigh Mahoney, Head of payments portfolio at ANZ
Smartphone shipments started to exceed PC shipments in 2011/2012. Since that time PCs have experienced a small resurgence but nowhere near the volume of smartphones (including tablets).
Look at how people connect these days – on the train, in café or just walking around. It's their smartphones. Even office workers, whilst using their employer-connected PC, have their smartphone not very far away.
More and more consumers, for a majority of activities, use a smartphone or tablet (let's call this 'mobile' from now on). We use PCs also but the first device we use is mobile (or for some of us we use a wearable such as Apple Watch). We use a PC when we need to prepare or examine in detail certain types of content.
Apple pretty much acknowledged this when it created its Handoff feature and Microsoft is introducing a similar feature in their upcoming Windows 10. I love using Handoff – I can start something on my mobile and then move to PC (or vice versa) without losing any productivity.
So what can we take from this? As usage has changed, has 'digital' really come to mean mobile first?
I tested this theory on myself (admittedly I'm pretty digitally savvy). Recently I went to pay for something I purchased for the family on an online auction site. When I went to pick it up the seller wanted a bank transfer for the funds. Guess what I used? The banking app on my mobile.
Where do I read the news every day? On my mobile. Where do I read my email first? You guessed it – my mobile. Where do I go first for banking and share trading? Yup - with my mobile. Where do I get my online alerts? That would be my wearable/mobile.
For me at least the statement is true – and the data shows it is now the case with more and more connected individuals. According to comScore and other research, in late 2014 the number of users on mobile overtook desktop for the first time. Like many professionals, jumping from meeting to meeting with a busy lifestyle means I depend on my mobile for most things – business and personal.
So if we are all using mobile first, why are some banks still wedded to desktop? Consider some different customer segments.
For banks, institutional clients are moving from the 'interactive' to the 'non-interactive' space. Businesses wish to use the investment in their own systems rather than use online desktop systems provided by a bank.
Multi-national corporations would much rather incorporate a set of banking programming interfaces into their treasury management or other Enterprise systems such as PeopleSoft, SAP or Oracle.
I haven't seen a corporate treasurer yet who has told me they love the proliferation of authorisation tokens such as RSA 'SecurID' or one-time password (OTP) devices that are issued by their banks in order for the treasurer to be on top of their multi bank relationships.
Usually these tokens or devices are hidden in a drawer or given to an assistant. In fact most people responsible for banking in businesses would much rather just use the application their employer has provided and leave the banking part to sit underneath.
SWIFT even developed the SCORE innovation in order to integrate direct into the back end banking systems instead of the front end online systems provided by banks.
Banks have evolved somewhat to provide corporate mobile apps for the busy executive so they can use their mobile to authorise payroll or creditor transfers and the like instead of having to log onto the traditional desktop service.
Like big companies, SME clients want integration with their accounting software suppliers such as MYOB, Quicken and others.
This segment hasn't time to compare their journals to their bank accounts – they want an integrated experience. This is where accounting software suppliers are now looking to the bank to provide the back-end integration traditionally used for the institutional segments.
This segment also increasingly uses mobile devices for invoicing, merchant acceptance and payments. Most banks have provided mobile apps to satisfy customer demand.
Retail customers want to do their banking in the most-convenient way possible. For those with a mobile (and that's most of us) that means using a mobile banking app for balances and transfers, using credit and/or debit cards for purchasing and using ATMS/EFTPoS to get cash. You can even use your mobile or wearable now to get cash from an ATM without the card. All of this happens without needing desktop banking.
Customers are still forced by their banks into desktop banking for things like making a transfer above a certain amount or when wanting to download statement data or for other analytics. Why?
Security of course is an issue, although an argument could be made in fact that online banking is less secure than mobile banking, especially with the rise of biometrics versus simple username/password systems.
Banks are now building security right into apps instead of worrying about the risks of hijacked internet browsers (where, ironically, banks use OTP sent via SMS to your mobile for!)
For each customer segment the trend toward mobile banking is obvious. When it comes to customer convenience it appears that desktop banking, whilst perhaps not dead, is at least breathing harder.
Leigh Mahoney is head of payments portfolio at ANZ.
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
13 Apr 2015
24 Jul 2015