In my last post, I recounted the extent to which the iPhone transformed the very notion of mobile banking. Let’s now shift the focus to catalysts for the next wave of banking innovation.
While the iPhone’s quantum leap occurred in 2007, its full impact on financial services didn’t emerge overnight because it took developers some time to leverage the opportunities this new platform enabled, and then another chunk of time for many financial institutions (FIs) and mass market consumers to embrace those capabilities. These phases were essential to making the smartphone the indispensable tool for navigating modern life, and they would be and will be repeated on rare occasions.
Let’s Talk Banking
Though you would not think so if you were too quick to believe the hype of the smartphone manufacturers, for the past few years most changes to the core device have been incremental – largely focused on speed and the quality of the display. While there is no doubt that these enhancements can improve the user’s mobile banking experience, they rarely create the foundation for entirely new features. Of course, as with all such blanket statements, there are noteworthy exceptions to mention.
Apple’s 2011 addition of Siri to the iPhone was one such exception. It is an exception not so much due to it being a “must-have, buy-this-phone feature,” but because it opened the door for programmers and the mass market to consider just how such tech could be used (see opening section, last line). It took the advent of the Amazon Echo and Google Home in 2016-17 to truly ignite this sector, but “conversational commerce” has become the new industry buzzword and mobile phones stand ready and able to support these tools.
Now, as those phases are once more completed, we are seeing people from Baby Boomers to Gen Ys willing to talk to their machines at home and in their pocket or purse. Natural language recognition has improved, and its combination with robo-advising and other forms of AI are now being talked about as fertile ground for services innovation (though spare me the already multiple sack cloth and ashes commentary on how AI is the end of FIs. That is simply the typical FUD you get whenever technology makes a move forward).
Thank You for Your Service; We’ve Got It from Here
It’s the ongoing innovation to the apps running on mobile devices that will drive banking’s near-to-mid-term evolution – all the more reason for FIs to double down on mobile solutions. Fortunately, there is still plenty of runway ahead of us to build out products capitalizing on existing platform capabilities, not to mention fostering further mass-market adoption of banking apps and features already in the market.
Banks and credit unions now interact with consumers via mobile with a frequency and level of detail that was simply unimaginable until recently. On the downside, by migrating many of these interactions to remote channels, they’ve lost in-branch opportunities to identify needs and offer additional services. Expect an increasing number of new products to address these cross-selling challenges.
The most attention-grabbing aspect of Apple’s latest release is the addition of facial recognition technology to its 10th anniversary iPhone X model. Here again, we may see a lag while programmers, manufacturers and organizations such as FIs work to leverage the full potential of this feature. Though this particular approach by Apple may not win the day, can anyone argue against any option that offers another way to leverage biometrics? FIs should add this to their list of other options for reducing friction from the mobile user’s experience.
I still hear people complain on airplanes about Apple removing the earphone jack from the iPhone a couple of models ago. In the iPhone X, the home button has gone bye-bye. I doubt the complaining about that will extend nearly as long, though I am sure there are people still reflectively pushing on the bottom of their screen trying to find it. People are moving toward a different user experience where physical contact (via a wire or a finger) is becoming less frequent. That user experience will manifest in our homes, offices and cars as they come to more closely mimic the computer on every iteration of the Starship Enterprise and Voyager.That is not so much sci-fi anymore - no touch, all speech, ubiquitous displays when needed. Though, I would hope that we can improve on that authentication model Roddenberry used. I mean, people shouting out their auth codes right in the middle of a crowded bridge full of everything from officers to ensigns. What was that about?