Mobile Financial Services

I had a good conversation this week with one of our senior IT managers about the financial services industry and the mobile web. I’ve been in financial services for a decade now, even working for the company who’s president (in)famously said “we’re a technology company that does mortgages”. Financial services and mortgage banking are fundamentally knowledge-based businesses, and IT is a critical factor to their success.

Our discussion though was around the mobile web and what financial services companies are doing in that space. For the most part, the answer is “nothing”, but there are some companies blazing a trail.

Mobile web for financial services is a lot like the regular web in the 90s. Companies are starting to create mobile-friendly versions of their legacy websites for the same reasons they created websites in the 90s: it is becoming an assumed price-of-entry for 21st century business. I doubt anyone is seeing a sales or customer satisfaction uptick from mobile-enabling their current web presence, but instead are doing it because everyone else is doing it.

The companies that are going to nail their mobile strategies are going to do so as part of a comprehensive marketing strategy which will include social media, mobile web and content marketing efforts. The perfect example of this is Quicken Loans, who are the technology leaders in this area for financial services.

While the B2C mobile strategies will be driven by marketing, the real value for financial service companies will be in the B2E space. I’m at a mid-sized company, and nearly every senior manager has an iPad. Most also have iPhones. The real value-add for a mobile strategy will be in maximizing the efficiency of these senior managers when they’re away from their desks through mobile-optimized reporting, dashboard and workflow applications. For example, every organization more than a few layers deep has approval processes for everything from purchases, to new hires, to contracts. Providing easy ways for managers to view and approve these via mobiles devices will be a huge timesaver.

The other growth area for mobile strategies in a financial services world is the sales forces. I had proposed doing a mobile web version of our site for our customers last summer, but after the business thought about it, they decided the biggest lift for the organization would be to provide mobile access to our backend systems for the sales force in the field. For example, an agent visiting a brokerage shop could get a lot of value around an application that provided location-based mapping of customers in an area, reporting around the volume and type or orders generated by that customer, and even be able to view the details on specific orders to answer questions while in the field.

Unfortunately, we never built the application due to other priorities, but this is definitely an area where a smart mobile strategy can add a lot of value.

One thing I see keeping companies from getting mobile efforts off the ground is a skillset gap. Financial services companies are heavily invested in Java and .NET, but the skill for building a good mobile presence are either web standards based (CSS3/HTML5/Javascript) or device-specific (Android, iOS/Objective-C). These are more specialized skills that are hard to justify staffing for, and are even harder to retain as the technology job market continues to heat up.

I expect to see a hot spot for boutique software consulting companies that specialize in mobile development which will sell their talents to financial service companies to build these presences. These companies will be able to combine the design and programming skills necessary to build the applications and mobile web sites that organizations cannot produce in house.

Usability (UX) is also a critical skill gap for financial services companies. Most internal development is built around a “good enough” mindset for user interface design. This is not scalable to the consumer-facing mobile world, where the quality of the user experience is a critical success factor for applications. And even the B2E users will have higher expectations for what they see on their smartphones over what they get on their desktops.

Finally, there is the whole “application vs mobile web” decision. Building a native application currently allows for the most seamless user experience, but it also introduces the same distribution hassle we saw with thick client applications. And there is also a data security question. Even in financial services, the world is turning to BYOD for mobile devices. Installing a company application on personal devices opens up the mobile device management can-of-worms, which is still the wild west.

Mobile web applications used to lag native applications in usability and performance, but thanks to Moore’s Law, and improved tooling, mobile web applications are more than up to the task for the majority of the applications being written, and will continue to improve rapidly. Just take a look at where state-of-the-art toolsets like Sencha Touch 2 are going, and the native advantage quickly disappears unless you’re writing 3D games.

I think mobile strategies for financial services companies are at the start of a growth curve that will climb quickly. While most B2C mobile presences will be more a “me too” strategy, there will be a few smart companies that maximize a comprehensive marketing strategy, hitting the right demographics, which will allow them to increase market share. This will be a rich area for disruption.

The real value in financial services for a good mobile strategy will be in productivity improvement in the B2E space. They just need to be prepared to pay someone else to write those applications, since they are probably severely lacking internally in the skillsets necessary to execute a successful strategy.

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