Are banks wasting money on mobile and online innovation?

I recently wrote an article about some research looking into what banks were intending to spend money on.

The research jointly done by Infosys and banking association Efma found that 70% of 330 banks questioned respondents are planning to increase their spending on innovation, with the mobile and online channels seen as the most important delivery channels for innovation.

Yesterday I attended an event at Visa Europe. It was all about the companies digital wallet. I am going to do an article about it but it made me question the logic of banks investing cash in mobile and online platforms when suppliers such as Visa as well as IT suppliers could do white label versions that banks could use.

Obviously the banks would have to give the services their own look and feel as well as their own security provision, but why not use a white label service and save the money spent on development?

When internet banking became a strategy at banks they all decide to build their own. But basically all the online banking experiences are basically the same why bother?

Yesterday Visa was talking about its digital wallet. It described how users could pay people money just by knowing their mobile phone number. So just like Barclays’ Pingit app that was recently launched.

I asked the Visa executive making the presentation whether Barclays had wasted its money developing Pingit. The answer was long and magnanimous.

Last year I interviewed Swift’s head of innovation, Kosta Peric told me that banks invested lots in internet banks in the belief that they could differentiate. But they couldn’t.

“They spent an enormous amount of money but it does not add a lot of value,” he said. “They could have established a shared service.” He says banks in Belgium share an internet banking platform.

It is very important for businesses to be able to identify where they can actually differentiate through technology. Even new services which are business critical, might not offer the opportunity to differentiate. Peric at Swift says an example of this is mobile banking. All banks want to offer mobile banking to consumers so they can reach every corner of the world.