Brett King is author of the book BANK 2.0, and is in the midst of founding Movenbank, the first direct mobile bank in the U.S. and U.K. He blogs for Huffington Post and on his own site, Banking4Tomorrow.com. Here are his seven points, condensed and edited from his full article on bankingexchange.com.
1. The “screen” has well and truly arrived. Unless you’ve been living in Outer Mongolia—and even there the iPhone is hot—you know the mobile has become the big thing. In 2012 if your bank still doesn’t have an iPhone application (app), you’ll be in the same category as your aging grandmother, who doesn’t know how to use Skype or doesn’t use email or texting. Quaint, but totally irrelevant to most customers.
2. Phone as a bank account and wallet. Telephone companies, app developers, PayPal, Apple, Microsoft, and others all will be dipping their toes in the “phone-as-a-wallet” play this year. The risk for banks is that they own only one small piece in the infrastructure: the account. No one party can “own” the mobile wallet, and the winners will be those that collaborate and cooperate.
3. Really knowing your customer. In 2012, the challenge will be integrating customer learnings and a single-view of the customer into a framework for dialog. This means more than simply pushing out Twitter offers. The new marketing team will look at customer behaviors and work to fit financial services into that landscape.
4. Bigger, smarter data. Organizations will start to collaborate on payments, on offer management, geo-location data, and other such customer-engagement schemes. Ensuring that data moves seamlessly and securely from one system to the next, or from one participant to the next, will require increasingly complex systems integration.
5. The conversation, not the platform. This year we’ll also start to see banks understand that social media platforms are now part of a growing dialog about the brand, products, and customer advocacy. Customer advocacy will grow as a dominant new metric, as banks try to measure the value and popularity of their brand in the social “cloud.”
6. Core system flexibility. The chink in the armor of many banks will be their aging core systems and the problem of bridging the gap between today’s real-time engagement and yesterday’s batch-based processes. Beset by limited budgets and the massive cost of core system replacement, banks will begin exploring alternative solutions.
7. Interbank and P2P transactions will vie. Peer-to-peer payments will continue to be a strong need for consumers in 2012. In the end, the goal will be simple: If I know your phone number, Facebook identification, or email address, I should be able to send you money.