Who Will Win the Mobile Banking Revolution?

Today, the value of the brick-and-mortar banking experience is fading quickly and mobile banking transactions are filling the void. But it seems that consumers are not so pleased with most mobile app experiences out in the marketplace, particularly with the big banks.  The basic features of account balances, transfers and mobile check deposits are expected basic functionality, but it’s not enough. Users want value beyond just transactions; customers want enriched interactions to understand what their money can do for them. The key to winning in the mobile banking space is relevance – whoever can make the mobile banking experience the most relevant to a user will win the revolution

What is relevance?

Relevance creates a personalized user experience: know what I want, when I want it, before I ask for it and make me smarter. From smartphones to wearable technology (e.g. Google Glass, smart watches, activity trackers, etc.), personal finance is interwoven into our everyday activities. Between the quantifiable self, need-to-know, and constant connectivity, our desire to be engaged with our money is increasing, changing our behavior and evolving what is expected from banks.

The experience can’t be just ordinary, it has to be extraordinary. If you simply spout numbers and balances, you’re not replacing the personalization that is eliminated when a user chooses mobile banking over their local branch with tellers. Mobile banking needs to help explain what a user’s money and transactions mean and what they can do. Users want an experience that is contextual, not just based on location, but also based on previous transactions, current account balances, and what is being planned for the near and long-term future. Banking data can be used to drive key decision points for consumers. The user expects the experience to be not only visually appealing, seamless and pleasurable, but also to take advantage of the latest technologies. Why can’t I know my current balance from my smart watch or Google Glass? A critical aspect of relevance is interacting with consumers where they prefer to interact.

So the big question is, who is winning?

Right now, it’s the startups – apps like Simple, Moven and Level. The start-ups are more nimble and are taking more risk to stay relevant. They’ve pushed beyond just a transactional experience to a lifestyle utility. They aren’t just a source of information, but are tapping into what money can help with, in a very personalized way. No one wants to see only how much they owe on their credit card. For many users, looking at a bank account is more of a source of stress. It has remained a relationship that was strictly transactional with deposits and payments. But when you help the user manage their money and look ahead at what their money can do for them, you become a source of hope.  Users want a relationship where someone is looking out for them, understanding their motivation and goals.

Solstice MobileBanking_Chart

Big banks are not out of the game yet. The new start-ups are missing years of data, historical trends and key partnerships. In order to delve into a rich contextual experience means tapping into Big Data and banking trends. So, my advice for the big banks? Put your customer and his or her experience first. Continue to innovate, rapidly iterate and bring new solutions to market quickly instead of getting stuck in analysis paralysis and letting start-ups beat you to the best in mobile banking.  Find ways that you can use disruptive technologies and a contextual experience to create more frequent and more relevant touch points for your user.

Last, but not least, the brick and mortar isn’t really dead. A true user-centered mobile experience can be a catalyst to drive a better experience across all of your channels, which is something the start-ups don’t have. The mobile banking ecosystem is still in its infancy. As it evolves, the ones to win the revolution will be those who innovate quickly and put a relevant, cross-channel user experience above all else.

 

Marisa MannMarisa Mann, Director of Solution Delivery at Solstice MobileMarisa brings over 15 years of experience in consulting and financial services industries to the Solstice team, working on large scale enterprise initiatives across many technologies, including specializing in the digital space – Internet and mobile. Mann is passionate about mobile and the endless possibilities for the enterprise, delivering business value through strong brand recognition and driving to excellence in the consumer experience. Prior to Solstice, Mann worked at JP Morgan Chase, Diamond Management and Technology Consultants, Washington Mutual, Inc, and Accenture.

 

The Klout-Influenced Credit Score Would Give Credit Where It Isn’t Due

*This post originally appeared on MyBankTracker

If you’re an insufferable person who speaks on social media panels with any degree of regularity, you’re probably more aware of what your Klout score is than you are your credit score. After all, you can check your Klout score all day — you can only check your credit score once a year from each bureau. Who has the time? You live an active social media lifestyle, and retweets probably matter more to you than your mortgage rate. You are pretty terrible. Well we’ve got good news for you: at Movenbank, your social media influence might soon influence your credit score — a terrifying thought!

Movenbank, a soon-to-launch financial services company, launched something called the CREDscore in private alpha. It is comprised of a number of different factors: your actual credit score, your personality and, yes, your social media influence. Strange as it sounds, Movenbank might actually make business decisions based on your Klout — or something a lot like it.

First, Movenbank puts you through a financial personality quiz to better understand your relationship with money. You’re assigned a “type”: salesperson, professor, accountant, rockstar, entrepreneur, officer, artist (wouldn’t want to get that one!), breadwinner or trader. For now, this is just filler, but it might factor into your score in the future.

The CREDscore also takes into account actually important financial information like annual income, how much you save per month, how much you have saved up, and your FICO score. So there is hard data factored into the score.

But users can also connect their Facebook, Twitter, LinkedIn or Google Plus accounts to give Movenbank a better sense of your social media influence. The company explains why in a blog post that describes different credit profiles that a CREDscore could benefit. Here’s Ashley, someone who has fallen on hard times, but has a lot of LinkedIn contacts:

Then there’s Ashley. Ashley’s a bit older than Matt and Jessica, but he lost his job a few years ago. Then he lost his house. Ashley’s suffering. The bank foreclosed and now he can’t get any opportunity to get new things started.

But he has an idea. He wants to launch a new business that makes funky trainers that tweet and check-in on foursquare as you run.

Sounds stupid, but don’t be fooled. According to LinkedIn, Ashley has a heavy influence on some potential investors who are sniffing around the ‘Tweener,’ as he calls it. The only thing is he has a problem. The mainstream financial service providers don’t want to know him.

Here at Movenbank though, we love Ashley.

We love Ashley because we can see he’s on the cusp of a breakthrough. But we can’t just give Ashley all the things he wants, so we offer him a deposit account and a limited loan facility to get the business started. The loan facility increases over time, as his Klout increases.

One reason why underwriters typically rely on hard data when assessing credit risk, is because dangling lots of money in front of people who need it desperately can often make them less than honest. Low-documentation and no-documentation loans are called “liar loans” for very good reason: if you’re self-reporting income to qualify for a mortgage, it’s easy to fudge it upward a bit, especially when your mortgage broker encourages you to. Despite what Movenbank would like to think, it’s very easy to fake social media influence — it’s just a pathetic and humiliating experience most of us would readily avoid. Unless we really wanted a loan from Movenbank, perhaps.

This sort of thinking only makes sense if you’re constantly surrounded by tech entrepreneurs all day, as they network and jockey for money and influence. Most of us never need business loans for shoes that integrate with social media. Our financial needs are personal: saving for our first home, retirement, our kids’ education, a vacation, whatever.

But in its defense, CREDscore addresses these issues, too. A higher CREDscore might mean better terms for customers on their accounts: higher savings rates, lower borrowing costs, or lower fees. Strangely, the range is not yet public; those who have been given CREDscores have not been told whether it is good, bad, mediocre, anything. Just: here’s a number, it might mean something later.

Movenbank will launch to the public later this year. And people with parody Twitter accounts might get a better rate on their savings account than you do. It’s strange, because one might reasonably suspect that introverts might have better financial habits than people who tweet every thought or joke that pops into their head. Being impulsive online is different from being impulsive at Macy’s, sure, but being freed of the rigors of a social life would likely cut 40% of the spending out of my monthly budget.

Klout is likely as good a measure of creditworthiness as waistline. Sure, I can infer a lot of lifestyle differences between the man with the 44 inch waist and the man with the 30 inch waist, but just because one probably spends more of his income on cheeseburgers, it doesn’t really tell me how likely he is to pay back a loan — and it definitely doesn’t mean he’s worthy of lower fees or higher savings rates, or vice versa.

But the CREDscore is still in its testing phase. It’s quite possible that none of this will come to pass. So you can stop spamming LinkedIn VC groups — you might end up burning bridges.

About Willy Staley:  Willy is a 25-year-old writer, and as a native San Franciscan, he is unreasonably loyal to Bank of America, if only for their superhero-like origin story, involving the 1906 earthquake and Italian fruit vendors.