It’s interesting talking with banks about mobile, and after
hosting a meeting about the impact of mobile payments and banking on European
banks this week, there is a homogeneity to the dialogue.
The core is that everyone believes mobile banking and
payments is taking over as the core essence of reach with the digitally native
customer but, and it’s a BIG BUT, how do you convince the customer to move to
mobile banking as their primary bank.
This was raised by a company that is primarily mobile
first. They have an internet banking site
but no branches, and they are very focused upon gaining trust through mobile channels.
The issue they face is that most customers are using the
bank as their secondary bank. Their
salary mandate, direct debits, credit transfers and primary bank activities
that make money are in their core traditional bank, whilst their fun and frivolous
daily life is managed through revolving balances in their mobile account.
I guess this conversation is indicative of the gradual
change that is taking place with some of us believing the change is happening
far faster than in reality (take note Brett King and Chris Skinner, ha!).
Sure, digital natives and Gen Y believe in technology, but
it’s interesting that their trust still lies with banks that have bank licences
and often bank branches.
Because they’ve been raised this way?
Sure, in part, but more fundamentally because banks with
licences are guaranteed to pay out if they go bankrupt. They are regulated and have consumer
protection of deposits. Banks without
licences, of which there are many and more growing every day, give no such guarantees.
Equally, banks with licences and branches give you somewhere
to go to beat someone up if you want your money back. More importantly however, they still provide
a fundamental human connection to money that does not exist with a 100 percent
remote bank offer.
Now, I can already hear the kickback from the digital fundamentalists
who decry such beliefs and yes, isn’t it proven by the plea of the mobile-only
bank that they cannot get customers to completely trust their offer as a
primary bank service proving that this is still the case (even with the Gen Y).
So let’s wait for the iGen before we write off traditional bank
models and structures.