2011 has not been an easy year at all: the overall economic situation was hard and several banks had to even reduce their branch networks. The online channel became vital for retail financial services providers thanks to its cost effectiveness. But usually this channel had been created as a service channel and now it has to be improved to a communication and sales channel. How do banks want to achieve this? I see the following trends on the market which will determine the upcoming year:
Internet banking: focus on user experience
Internet bank is the ideal channel for sales and communication purposes: customers are fully identified here, and they visit this channel on a regular basis. Do you know any other industry which possesses a similar great online service point?
However internet banks were mainly designed for transactions and not for a sales and communication platform. In order to fulfill this new role and shield the online channel with better sales and communication capabilities, the user experience of internet banks should be improved; it should be increased to the level of web shops, online booking systems. Because the visitors are educated and indulged on these type of portals and they expect the same level of user experience from their banks. This is a huge but unavoidable challenge for banks for the coming year if they want to use this channel for sales and communication purposes.
Over and above, personalization and CRM capabilities are also important for this channel, so I expect a lot of development in this area.
Mobile banking and mobile payments
Mobile banking is the rising start with a huge potential. The easy to use and smart devices, the high data transfer capacity of mobile networks and users’ habits have opened a new space for the mobile services in every industry. And mobile is not restricted to smartphones any more: Morgan Stanley says that 27% of iPad purchases will be made instead of buying a desktop PC and 44% instead of buying a laptop in 2012!
As people get used to do everything on mobile devices, they expect the same from their banks. It is not only a must but also an opportunity for banks as they can use mobile as an excellent sales channel. Therefore location based marketing and location based services will also be a key issue for banks in the coming year.
Mobile banking and mobile payments seem to diverge: while banks offer more and more solutions for mobile banking, mobile payment services will be dominated by non-bank players like Google or the mobile network operators. The big question for banks in 2012 is whether they find their role in mobile payments.
Personal Finance Management: an opportunity now, a must tomorrow
Personal finance management has been here for several years, but only few banks have started offering this type of service. But now banks seem to be willing to implement PFM: just to mention one global player, Citibank went live with PFM this October. What has happened? Since the importance of the online channel is skyrocketing, it is vital for banks to differentiate themselves on the online channel. And PFM helps banks to get to know their customers better and we should not forget about the sales opportunity provided by PFM.
Banks have 1 or 2 years from now to make a quick move and start offering PFM. If they do so, they will gain an advantage on the market. If they delay implementing PFM, the market will force them to do so.
Online sales
There will be no bank in 2012 that can ignore the online channel as a sales channel. The portal (and microsite network) is responsible for customer acquisitions, while internet banking and mobile banking are great channels for cross sales.
Selling online however, is not only an issue for the electronic channel: this affects all areas in the bank from the product development to the internal processes. Successful acquisition requires streamlined customer origination processes (including branchless account opening) while successful cross-sales depends on personal and pre-approved (if applicable) offerings.
All in all: online banking will be one of the strongest factors which influence the entire financial services industry in 2012. I expect an exciting year in 2012!
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