Almost three quarters of retail banks are increasing how much they spend on innovation as they attempt to better engage customers through mobile and online channels.
According to a study of 300 banks in 66 countries, carried out by IT supplier Infosys and banking association Efma, 70% of respondents are planning to increase their spending on innovation, with the mobile and online channels seen as the most important delivery channels for innovation.
The use of online banking and the explosion in the use of smartphones and tablets has given banks the opportunity to engage with customers in new ways. Increased competition makes innovation essential.
For example, the survey revealed 93% of banks will offer mobile payment services and 89% plan to offer bespoke tablet banking applications to customers in the next three years.
One such example lies in value-added services such as personalised location-based offers. Infosys predicts that, in three years, more than 76% of banks will focus on this area, up from just 8% today.
Banks are attempting to improve customer experiences through more interaction. To this end, 87% are focused on integration with social media; and 86% on interactive services such as web chat and video conferencing.
Barclays bank has launched a mobile banking application that will enable mobile phone users to make free payments to other UK mobile users directly. The move follows the bank’s work on a private cloud that will underpin the app as well as a raft of cloud-based mobile banking services that are set to follow.
HSBC recently made its online banking app for businesses available on Google’s Android mobile operating system (OS). The Business Banking app – which is already available on Apple and Blackberry devices – will now be accessible to hundreds of thousands more users.
The survey showed that branches currently receive the highest proportion of discretionary IT budget at 27%, compared to 26% for online and 20% for mobile. But respondents across all regions said online and mobile are the most important channels for innovation.
"The growing focus on mobile devices and online innovation reinforces the rapid adoption of these channels. By offering increased interactivity and personalisation, they clearly have the potential to drive growth,” said Patrick Desmarès, secretary general at Efma.
The Society for Worldwide Interbank Financial Telecommunication (Swift) recently said banks must decide how they invest in mobile payments platforms. The question is whether to build their own platforms or share.