Mobile wallets will be the next battleground among businesses from various sectors – including financial institutions (FIs) in the fight for ownership of the consumer relationship. 2012 witnessed the introduction of myriad mobile wallet trials, and the mobile wallet wars will only continue to grow in 2013 and beyond.
For FIs, this is driving the emergence of a new mobile wallet paradigm, with the mobile account management application becoming a unique and powerful vehicle that allows FIs to defend their existing business and extend to new markets while strengthening their customer relationships and creating new revenue opportunities.
To win the battle for the mobile consumer, FIs must leverage key assets at their disposal in order to gain and maintain top of wallet status by driving deep customer engagement. The pace of innovation will continue to accelerate as consumers integrate mobile into every aspect of their lives — including their purchasing activity.
The potential for a fully disintermediated or weakened customer relationship is top of mind among FIs as new payment business models create serious risks for the status quo.
In their haste to introduce mobile offerings to keep pace with competitors, many FIs are taking a short-term, tactical approach, versus a long-term, strategic approach.
Some are simply “checking the box” by placing a mobile application in front of their existing online banking channel, architecturally pointing the solution inwards towards the FI’s internal systems. While providing a quick fix, the results often lack deep functionality and deliver a poor user experience.
Six elements are required for delivery of a successful mobile wallet strategy:
The mobile platform should be architecturally “open” to integrate with third-party content providers. Bank-grade security ensures that services are delivered with complete confidence to any mobile device.
Perhaps most importantly, the platform must be highly reliable and proven architecturally to support real-time payments and commerce activities.
2) Consumer-Specific Application Segmentation
FIs need to provide a “package” of mobile services and offerings that are adapted to the needs of a specific customer group or demographic segment, rather than a “one-size-fits-all” solution.
3) Mobile Money Services
The mobile wallet architecture’s success is ultimately based on the type of content it delivers. Initially, access to customer account information is the primary reason a consumer will engage with the mobile application.
Over time, FIs can shift this relationship “outward” – providing value-added services such as bill pay and person-to-person payments. Finally, the application serves as a mechanism to enable delivery of FI-specific or third-party commerce opportunities.
4) FI and Network Commerce Content
A mobile wallet strategy will only be successful if relevant and value-added content, such as offers or loyalty points – provided by the FI or third-party partners – can be delivered as part of the overall application experience.
This provides opportunities for richer, more attractive consumer propositions that will increase revenue and deepen customer relationships.
5) Optimized User Experience
Viable mobile commerce solutions must ensure customers can seamlessly interact with their FI using their preferred mobile device – be it a smartphone, feature phone or tablet.
It is critical that the solution can keep pace with new operating system releases in order to maintain performance, leverage new capabilities and reduce customer attrition. It is important to allow customers to set preferences that align their mobile experiences with their individual lifestyles.
6) Continuous Innovation
The mobile wallet’s architecture must have the flexibility to adapt to rapidly-changing market conditions, improving or enhancing capabilities as needed.
For example, NFC, cloud or QR code payment options may need to be incorporated into a mobile wallet initiative at some point.
Continuous innovation is essential, because it delivers ongoing value-added services to serve FI customers’ Mobile Money needs. It also continues to support top-of-mind awareness of the FI’s account management application, and ultimately, its brand.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Asian Banking & Finance. The author was not remunerated for this article.
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