mobile banking: l’esperienza di ing direct us ·...

© 2012 IBM Corporation

Mobile Banking: l’esperienza di ING Direct US

Fabrizio Renzi, Direttore tecnico e innovazione, Banche ed Assicurazioni

IBM Italia

The Innovation Group BANKING SUMMIT 2012, Milano 20 settembre

2 © 2009 IBM Corporation 2 © 2012 IBM Corporation

Una diversa visione del mondo (economia e servizi finanziari)

PIL 2015 (equalizzato potere acquisto)

Import servizi finanziari (banche e assicurazioni)

Export servizi finanziari (banche e assicurazioni)

www.worldmapper.org

PIL 1990 (equalizzato potere acquisto)

http://www.worldmapper.org/


www.worldmapper.org

Un primato italiano nel mondo (numero di cellulari)

http://www.worldmapper.org/


Italia primo paese non emerging come importanza del

mobile banking per i consumatori

Importance of mobile banking

27%

26%

24%

29%

30%

25%

22%

17%

16%

14%

14%

13%

11%

12%

12%

11%

11%

10%

19%

33%

29%

29%

19%

16%

15%

14%

12%

9%

10%

9%

9%

7%

6%

5%

5%

4%

3%

14%

Brazil

India

South Africa

Russia

China

South Korea

Singapore

Italy

Germany

Sweden

US

Canada

Australia

Japan

Spain

UK

France

Netherlands

Global average

Important Very important

Source: Datamonitor FSCI survey June 2010

All in Emerging

Compared to: global average for “Importance of online banking” = 74%


100%

52%

62%

95%

76%

14%

95%

14%

38%

24%

38%

5%

14%

43%

100%

38%

75%

94%

69%

13%

94%

13%

50%

38%

56%

6% 13%

38%

Quali funzionalità offrite attraverso Mobile Site e App?

Mobile Site

App perSmartphone

Fonte: Mobile Banking: la banca a portata di mano. ABILab – Politecnico di Milano.

Intervista ABILAB/PoliMI su funzionalità mobile banking in Italia

(saldo/movimenti, bonifico, ricarica cellulare)


Bank’s concerns and IBM’s suggestions

ROI (Return on Investment)

“My competitor has a mobile app. We should

get one too… The local software house has

one and can do it cheap.”

Without a clear roadmap and expectation on

value, many banks took a “me-too” approach.

Consumers are emotionally attached to their

phones. A bad app is worse than no app.

TCO (Total cost of Ownership)

“We must support the latest Android, iOS, BB,

and Windows plus Java ME for feature phones.

Don’t forget SMS and push notification. On top

of those, tablets too. We are under-budgeted

and under-staffed.”

Many banks have found it difficult and costly to

maintain apps for different mobile OSs.

Security

“Please enroll at your local branch.”

“Please activate the mobile app at Internet

Banking”

“You will receive a security token in the mail

in 2 weeks”

Many banks do mobile security at the

expense of adoption and user friendliness.

Have a roadmap to

business value

Banks must see mobile as a strategic

channel and a competitive advantage. Major

benefits are:

(a) Mobile payment (with mobile wallet being

the ultimate prize)

(b) Mobile marketing

(c) Reduce cost of transaction processing

(d) Reach to the unbanked

Customer adoption is key. Aim at 100%

penetration and drive up adoption with

(i) easy but secure enrollment

(ii) super convenience

(ii) some wow features.

Consider a write-one

run-everywhere

mobile dev platform

Industry-leading MEAP (mobile enterprise

application platform) such as IBM Worklight

or ISV (like Kony Solutions) have the write-

once run-everywhere capability, which

provides the following advantages:

(a) lower TCO

(b) shorter time-to-market

(c) consistent cross-platform user experience

Take a balanced

approach

Mobile security is not just a technology issue.

It’s also about perception & user education.

IBM’s suggested DO’s and DON’Ts:

(a) Don’t tie enrollment/registration to branch

or internet banking

(b) Don’t sacrifice user convenience

(c) Do focus on education

(d) Do adopt a risk-based approach for 2nd-

factor authentication (i.e., unusual behavior

or fund transfer over certain threshold)

(e) Do evaluate all methods for 2nd-factor

authentication, including voice password.

Ban

k’s

top

co

nce

rns

IBM

’s s

ug

ges

tio

ns


ROI: How can the bank monetize this opportunity?...

….… and increase ROE

Indirect/not quantifiable measure Key Direct/ quantifiable measure

Direct profit impact of

adopting a mobile channel

Profit/ Margin expansion

New revenue sources enabled by mobile banking

New Revenue

New cost reduction opportunities enabled by

mobile banking

Costs reduction

Transaction fees

Additional services to third-parties

Additional services to end-users Other margin

expansion opps

PTI

Cross sell existing products

New customer acquisition

Increase of assets under management

Brand benefits (marketing)

Other benefits

Other indirect benefits enabled by mobile banking

Social impact

Reduction of average trx cost

Reduction of client loss rate

Reduction of expansion cost

Support of government agenda

Lesson learned

As mobile banking adds complexity

to infrastructure, the bank will

struggle to justify the investment

especially the on-going costs to

update/operate. After

quick_and_dirty “me-too” phase 1

the bank should focus on a more

strategic approach with focus on

real benefits and these high-value

functions (e.g., lower transaction

cost, campaign delivery, customer

growth, reduce churn, mobile mktg

oppty, brand benefits, ….)


TCO: Build or Buy ?

1. Build from

Scratch – develop native or

web-based

applications 2. “Build with

Middleware” –

develop with middleware

and advanced toolings

3. Built with IBM

services or Buy

from IBM partner 4. Undifferen-

tiated

Hosted

Service – Use hosted

services that

offer no

competitive

differentiator

Lesson Learned

Banks should avoid building from scratch as time-to-market is critical

for the fast-evolving field of mobile banking. Banks should also avoid

those hosted services that provide minimum differentiation.

Not recommended

Not recommended

After phase 1

complexity increases

and time to market is

critical

Mobile Is a

competitive

differentiating factor

for the bank

Recommended Recommended


Web Hybrid Native

Performance

Dev cost

Dev time

App portability

Native functionality

App store distribution

Extensible

Reasonable Reasonable Expensive

Short Short Long

High High None

No All All

Fast Native speed

if needed Very Fast

No Yes Yes

No Yes Yes

TCO: write once run on every device approach

Recommended

Lesson

learned Hybrid approach can

achieve the look-and-

feel and rich functionality

of native apps, while

lowering the cost to

develop for multiple

OS/versions as well as

on-going maintenance

and upgrades.


TCO: Back-end system integration is critical also to reduce

IT costs

Lesson learned

Banks are providing multiple

modalities for mobile banking,

highlighting the importance of a

channel integration layer. In

addition to shortening time-to-

market with reusable services,

channel integration also

provides precious insights into

channel intelligence (how

customers access bank’s

services) and channel

transitioning (e.g., tech support,

customer services, remote

expert advice) as well as

increases the effectiveness of

cross-selling and campaign

delivery.

Partners like IBM with strong

experience, and assets in

application integration space is

critical.

Enterprise Services Bus

DEPOSITS LOANS PARTNERS

Information Integration

BRANCH Full Service

Supermarket

Mobile Bankers

SELF SERVICE ATM

Kiosk

IVR VRU

ELECTRONIC Web

Wireless

CALL CENTER Inbound

Outbound

PARTNERS

Security & Access

Analytics & Intelligence

Reusable Components

Service Invocation

Channel

Integration


Security is mobile customers N. 1 concern

Source: Javelin Strategy & Research, 2009 Mobile Banking and Smartphone Forecast,

September 2009

Lesson learned

Security is critical to the

success of a mobile banking

program and has significant

impact on customer adoption.

Too much security often

makes mobile banking

difficult to enroll and use

while too little security also

hurts adoption with low

confidence.


What is coming next?

• Attract/retain clients

• Serving the underbanked

• Mobile payments

• Mobile marketing


New Citigroup study (aug. 23° 2012) findings

Source: Citigroup, Citi Economic Pulse, Aug 23, 2012


Mobile is the deciding factor when switching banks !!

• Mobile banking adoption expected to approach 50% by 2016

– 15% today

– 12% 2Q 2011

– Between age 18-34: 30%

– Between age 35-54: 15%

• 39% say mobile offerings were important in their decision to switch banks

• Mobile banking users who switched banks in the past year:

– 32% chose mobile banking as preferred attribute

– 24% fee level

– 21% branch convenience

– 21% customer service

– 9% deposit rate

• Opportunities for differentiation are opening for banks

Source: Alix Partners, http://www.alixpartners.com/en/MediaCenter/PressReleaseArchive/tabid/821/articleType/ArticleView/articleId/203/Smartphones-Rapidly-

Transforming-Mobile-Banking-From-New-Concept-to-Tablestakes-According-to-AlixPartners-Study.aspx, Feb 22, 2012

Mobile banking is the most important deciding factor (32%) when switching

banks, more important than fee (24%) or branch location (21%) or services

(21%)… a survey of mobile banking customers in the U.S. by AlixPartners.

http://www.alixpartners.com/en/MediaCenter/PressReleaseArchive/tabid/821/articleType/ArticleView/articleId/203/Smartphones-Rapidly-Transforming-Mobile-Banking-From-New-Concept-to-Tablestakes-According-to-AlixPartners-Study.aspx





























IBV banking 2015 study : Banking customers’ behavioral

changes demand mobile banking

How Will

They Bank?

Value in 2015

How Will

Banks Court

Future

Customers?

Gen Zers (18-27)

Gen Yers (28-38)

Gen Xers (39-49)

Boomers (50-67)

Seniors (68+)

15% of population

5% of assets

20% of population

10% of assets

15% of population

15% of assets

30% of population

35% of assets

20% of population

35% of assets

• Demonstrating little

loyalty

• Focusing on

consumption, with

minimal savings

• Demanding

mobile banking

• Demanding personal

control but rapid

bank response

• Managing large

number of life events

(moving, marriage,

children) that require

financial decisions

• Focusing on longer-

term goals

• Building significant

wealth via

investments,

educational

savings, retirement

assets

• Becoming

increasingly

conservative

• Focusing on

wealth

preservation,

transfer, retirement

• Using multiple

providers

• Continuing to be

conservative and

price sensitive

• Offer on-line services,

basic products

• Strive to grow with

customers, who are

willing to share info

• Technology

leadership

• Offer consultative,

collaborative approach

to sales, service (incl

online)

• Create bundled,

flexible products

• Lifestyle branding

• Technology leadership

• Offer non-traditional

banking products to

satisfy life stage

needs

• Provide greater

access to onsite and

remote specialists

• Transition

consumers to

preservation-based

products, services

• Enhance multi-

channel delivery

experience, highly

demanded by this

segment

• Enhance

transparency in

customer service

• Offer consultative

approach to sales

• Enhance branding

for security,

advocacy

Behavioral Change to 2015 Radical Gradual

Note: Percent of population and percent of total assets controlled are represented only for people 18 and older

Source: Forrester Research; IBM Institute for Business Value


Mobile banking represents an opportunity to reach to

the unbanked and under-banked

Source: GSMA Mobile Money for the Unbanked; Citi Investment Research and Analysis, Citi GTS

Findings In almost all countries

(mature and emerging),

penetration rate of mobile is

much higher than banking.

In emerging countries where

banks are struggling to reach

the un-/under-banked,

mobile represents a great

opportunity. In mature

markets immigrants are the

fast growing segment of the

population. It’s important to

recognize the needs of un-

/under-banked. Most of the

time it’s payment.


The value of mobile payment transactions globally was

$86B in 2011 and growing to $426B by 2015. 2011 Global Mobile Payment Users are 141M

Growing to 349M in 2015 (CAGR 35%)

Source: Gartner “Forecast: Mobile Payments, Worldwide, 2008-2015”; Pub May 2011

Mobile Payment Users

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

2008 2009 2010 2011 2012 2013 2014 2015

Th

ou

san

ds

Mobile Payment Users by Region

2015

Western

Europe,

21.2%

North

America,

14.4%

EMEA ,

23.2%

Latin

America,

4.8%

Asia/Pacifi

c, 36.6%

2011 Global Mobile Payment Transaction

Volume is growing at CAGR 47%

Asia Pacific

dominates,

representing

36% of Global

users

Mobile Payment Transaction Volume

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2008 2009 2010 2011 2012 2013 2014 2015

Millio

ns

Mobile Payment Transaction Value

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

2008 2009 2010 2011 2012 2013 2014 2015

Millio

ns o

f D

ollars

2011 Global Mobile Payment Transaction

Value is growing at CAGR 49%

$86B

$426B

Mobile Payment Transaction Volume by

Technology 2015

SMS,

53.4%

WAP/Web

, 25.9%

USSD,

5.4%

NFC,

15.2%

SMS dominates, at

53% of volume.

NFC is only 15%

Mobile Payment Transaction Value by Region

2015

Western

Europe,

22.9%

North

America,

14.7%

Asia/Pacifi

c, 27.9%

EMEA,

32.7%

Latin

America,

1.8%Growth

Markets

dominate at

62% of Value. Note: EMEA does not

include Western Europe

2010: 185M

Source: CGAP: “The State of the Branchless Banking Sector” May 2011

Note: EMEA does not

include Western Europe


Mobile marketing – key to achieve ROI

Source: The CMO Site, Getting the Most from Mobile Marketing

Biggest gap

Findings

Banks need to quickly progress their mobile platform

from providing basic banking services to mobile

marketing. The anytime, anywhere and intimacy of

mobile devices can help realize business value rapidly.

Mobile marketing needs to be targeted:

Analytics-powered: Based on the client profile,

understand what to sell, when to sell, where to sell and

how to sell.

Event-driven: Events can be a life stage, time of

day/month/year or triggered by another event. For

example, an event triggered by air ticket purchase may

mean a chance to cross-sell travel insurance.

Location-based: This is the unique feature of mobile.

Being at the terminal may present a chance to sell travel

insurance or foreign exchange.

Also, leverage what the customers inputted: web

analytics, site visited, QR code, social checkin, etc.

The proliferation of smartphones and tablet devices presents new opportunities and challenges for marketers to

reach customers where they are and when they’re ready to buy. Apps, the mobile Web, social check-ins,

geofencing, and mobile ad standards are among the tools marketers need to master in this new world.


Un grazie a ING Direct US

… ed uno a voi per l’attenzione

[email protected]

mailto:[email protected]

mobile banking: l’esperienza di ing direct us ·...

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