Tablets and Banking: A Potent Mix

When we think about tablet computing—and we should be doing that a lot—here’s just one figure we need to absorb and fully internalize: 138 million.

No, that’s not how many tablet users there are now, or might be in the near future. It’s how many individuals will be using their tablet to do their banking by 2018.

Think about it: Just four short years ago, tablets basically didn’t exist (apologies to those with longer memories of the Newton and other attempts to create a full-on mobile computing market). Then the Apple iPad arrived, and the world changed.

Now, according to “Tablet Banking Forecast 2014 – 2018: Design and Deployment Strategies for Mass Adoption,” a new report from Javelin Research, tablets are well on their way to replacing laptops in the standard consumer environment. Adoption has officially hit the 50% mark, a stunning achievement by any measure.

Sure, there are inevitably signs of a slowdown. It was just reported that iPad sales fell by 9% in the last quarter, and the company’s revenue has also been hurt (in relative terms, of course—Apple still has big profits) by the fact that people are buying cheaper models. But on the flip side, Apple is also partnering with previous arch-nemesis IBM to sell industry-specific iPads, starting as soon as this fall. That could have a huge impact on tablet adoption and use.

But whatever happens in the big picture, the most relevant statistic may be that the number of people using tablets to do their banking has increased tenfold in just the past three years. That’s likely a growth spurt we’ve never before experienced in our industry, and we need to take note. It means undertaking a full evaluation of what we’re doing now to cater to this market, and what we should be doing instead.

Here’s the reality: We all acknowledge that there’s been a steady march toward mobile banking—the numbers are undeniable. Bank of America had 13.2 million mobile customers last year; now it’s up to 15.5 million, a 17% rise. Wells Fargo just announced that it’s got 13.1 million active mobile customers, a 22% spike over last year. It’s 23% in Chase’s case, and 21% for Citigroup.

So is that a march or rather a sprint? And if it is a sprint, are we keeping up?

Let’s also acknowledge that this is all a good thing. The practice not only helps save banks money but also offers enormous convenience to those who have accounts but might live in remote areas, and a new level of access to those who are unbanked. By any definition, this is a source of incredible new revenue and profit streams.

But change doesn’t come easy. When the Internet itself first arrived, the sheer level of opportunity caused consternation in many industries, and financial services was no exception—for online banking to succeed, many standard operating procedures had to be radically transformed, which inevitably created problems. Then the move toward company-specific applications, especially as they applied to the mobile universe, brought another transition. That was accompanied by its own high level of discomfort, thanks to the diversity of form factors and operating systems involved.

So that brings us back to the tablet. Yes, it’s one more mobile device, a fundamental component of the larger mobile universe. But is there more to it?

After all, the laptop was the original mobile device—we carried it around in a way that the desktop PC never allowed, and that changed our basic relationship with the computer. It took a while for many companies and their application developers to grasp that fact. As tablet adoption speeds forward at a breakneck pace, replacing laptop usage in the process, should we be developing strategies that are specifically for this form factor, rather than the laptop above and the smartphone below?

It may be a little early to be asking that question. But then again, looking at the numbers, maybe not.

Game On: The Chase for NFC-Enabled Mobile Payments

Banking is serious business for serious individuals and institutions. Financial services are for stable entities in thoughtful, analytical environments. This is real life for the real world. It’s not a video game.

But then again. . .

A couple of years ago, Nintendo earned praise for incorporating some new and exciting capabilities into its new Wii U platform, such as the GamePad, a new controller with a 6.2 inch touchscreen. But there was also something else. In fact, this was the first gaming platform to incorporate Near Field Communication, or NFC.

But that’s gaming. Here’s what it has to do with banking.

First, for the uninitiated, NFC comprises a set of standards for mobile and other devices to establish radio communication through touching or proximity, collectively encompassing a broad spectrum of communications protocols and data exchange formats. We already have quite a few applications taking advantage of these protocols, from contactless transactions to simplified Wi-Fi.

As the industry trade publication American Banker pointed out recently, financial services corporations have long sought to boost the use of NFC services for mobile payments. But as with many other aspects payments, success has been hard to come by. And that’s exactly why hose sober, solid and sensible banking industry types should look to industries such and video gaming—and more specifically companies like Nintendo—for pointers on what to do.

To be sure, there’s quite a bit of success to emulate. The original NFC technology in the Nintendo console didn’t seem to have much purpose, but the company recently that the reader will come to life through a series of NFC figurines that easily interact with many popular games.  Those figurines, incidentally are also sold as action figures; the character equivalents take life in the game, and can follow multiple storylines in accordance with the layers’ preferences.

Here’s one sign of the success. This represents another potentially lucrative channel for the creators and owners of these figurines, including Disney and Activision. The latter’s Skylanders was an original backer of this concept, and the franchise passed $2 billion in revenue earlier this year.

Here’s the point: Consumers can make mobile payments through a variety of channels right now, saving massive costs for the financial services institutions involved. But very few are doing it.  There might yet be large-scale adoption, and the numbers will surely keep growing, but the truth is that technology is a fickle business. We don’t really know why some advances take off immediately and others take time. So far, at least, this one hasn’t.

But we also know that the next generation—the one obsessively playing video games right now—will be opening back accounts soon enough. Those now-youngsters will have absolutely no understanding of a world without millions of mobile apps, and it will be completely comfortable with NFC.

Banking and multi-players games surely make for an odd hybrid, but there are precedents. Innovators such as American Express have been embedded in this market for years, specifically to wean an emerging generation of cardholders. Several telecom giants have also had some success with built-in NFC capabilities.

Today, it seems like a long leap from shoot-’em-up games to, say, mortgage banking. But that’s exactly what innovation requires—a leap in imagination and then practice. Those pesky kids playing games today will be opening bank accounts and making payments tomorrow. We need to find ways to reach them before that.

Are You Creating a Safer Internet for Your Members and Customers?

As more banking customers interact with their financial information online, it becomes ever more important that they know how to conduct themselves responsibly online.

Tomorrow, on Safer Internet Day, February 11th, ConnectSafely.org is asking Americans to spread an epidemic of kindness and share the #OneGoodThing  they’ve done, or seen somebody else do, to make the Internet a better place. Safer Internet Day (SID) is a global campaign to promote safe, effective use of the Internet and mobile technology. Hosted in the United States by ConnectSafely.org, Safer Internet Day is commemorated each year on the second Tuesday of February.

SID is a great opportunity to take the time and think about how you’re educating customers and members to be safe online, and reflect on the positive ways technology impacts the way we bank and interact with our finances.

Share your #OneGoodThing on Twitter, Facebook or submit here to spread kindness and celebrate the ways that the online world helps us every day so we can create a better internet together.

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