Has Online Banking lost the race?
12 May 2015
As Finovate Spring approaches, my thoughts turn to what we can expect from the gathering. What new and exciting ideas will there be for digital channels? Thinking about such questions, I found myself unwittingly recalling the most remarkable presentations from recent conferences, news, blogs or announcements from the market.
My most surprising observation has been that almost all of the cool and loud stuff is happening in the Mobile space. Mobile payments, wallets, all the new apps and ideas on wearables are disrupting the market.
But what about the good old Online channel? Is anything happening there? Is it dying out or losing the race? Not really. Online usage penetration still surpasses Mobile on all continents and it is still growing. So there must be some innovation happening in this space too.
Here is my view of the hot topics of today.
1-2 years ago there were only a handful of companies highlighting UX as a key selling point. Putting more emphasis on the usability itself is not unique any more. You can see UX buzzwords all around on conferences on roll-ups, marketing material and presentations. Can we say disruption is already over in this regards? I believe yes, but incremental innovation can still be expected – in areas such as video visualization.
KYC (Know Your Customer)
We have seen some very good examples on simplifying KYC steps during onboarding or account opening processes. Number26 Bank in Germany offers an onboarding in minutes with no physical documents involved. Jumio provides real time ID verification processes. These are true innovations, for sure, but I would not call them disruptive as the problem they are solving are not a day to day problems for users.
Digital sales tools are also not newborn concepts. The sales potential of digital channels was realized several years ago. Companies are still trying hard to exploit it. There is still plenty to do. Research with EFMA shows that in 2013 still only 9.2% of sales happened through the Online channel (and only 1.1% on Mobile). There are good signs of improvement though. Location based offers (which is Mobile again) and analytical tools have improved. They serve as a good base for targeting mechanisms.
Personal Finance tools are very similar to Digital Sales. They have quite a history already but are still evolving and delivering new concepts. Analyzing past expenses isn’t so exciting any more. Something extra is needed to keep users coming back repeatedly. Financial planning, advisory, gamification or reward programs are certainly something which can help to achieve this.
This is not an exhaustive list. I believe the conclusions can be drawn. I can't see one big thing disrupting the Online market, instead, I see continuous incremental innovation resulting improved services for both banks and the end-users.
But let's see if someone is planning a big surprise for San Jose.
What innovations are you seeing in the Online Banking space?