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Part 2 | Banks, Mobile Technologies and SMAC

MobileEnterpriseStrategies.com

This article is Part 2 in this series (read Part 1 here).

For those that missed Part 1, Peter Abatan, my colleague at Cognizant and a banking industry and mobility expert, has been sharing his thoughts on trends in the banking industry.  The following points come mostly from his email messages to me and his blog articles.  He believes Internet and mobile banks will create increasing competition for traditional banks for the following reasons:

  • Checks are quickly becoming obsolete.  In fact, the UK plans to phase out checks by 2018.
  • Internet and mobile only banks will not issue or process checks; instead they will offer alternatives by which you can make payments. This reduces their operation costs.
  • People are carrying less cash than they did 5 ago.  That makes ATMs less important. According to the Financial Times (FT), UK consumers did nearly 10% less shopping with cash in terms of monetary value, in 2012 than in the previous year. FT goes on to say that the use of debit cards and newer methods such as PayPal are making gains compared to the use of cash. If ATMs are needed, Internet and mobile only banks can always join existing ATM networks so that members can withdraw cash.
  • Internet and mobile only banks will be able to pay more attractive interest rates because they have few or no branches and fewer employees to support.  This is a significant competitive advantage.
  • P2P banking (peer-to-peer), NFC (near field communications) and contactless payment adoptions are on the rise: The number of retail outlets that receive small payments through contactless technology is on the rise, at the same time P2P payments, using mobile apps like Barclays Pingit, are increasing in popularity and enabling users to transfer a limited amount of money to another person or business without going through a traditional bank.
  • P2P lending may become the killer app in the banking industry. This is where Internet and mobile only banks can excel. These technology-focused banks can provide P2P lending services, by matching lenders, borrowers and satisfactory interest rates, then charging a fee that will enable them to provide higher ROIs for their customers.


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Kevin Benedict, Head Analyst for Social, Mobile, Analytics and Cloud (SMAC) Cognizant

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Learn about mobile strategies at MobileEnterpriseStrategies.com Follow me on Twitter @krbenedict Join the Linkedin Group Strategic Enterprise Mobility ***Full Disclosure: These are my personal opinions. No company is silly enough to claim them. I am a mobility and SMAC analyst, consultant and writer. I work with and have worked with many of the companies mentioned in my articles.

More Stories By Kevin Benedict

Kevin Benedict is an opinionated futurist, Principal Analyst at the Center for Digital Intelligence™, C4DIGI.com, emerging technologies analyst, and digital transformation and business strategy consultant. In the past 8 years he has taught workshops for large enterprises and government agencies in 18 different countries, and is a keynote speaker at conferences worldwide. He spent nearly 5 years working as a Senior Analyst at Cognizant (CTSH), and 2 years serving in Cognizant's Center for the Future of Work where he wrote many reports, hundreds of articles, interviewed technology experts, and produced videos on the future of digital technologies and their impact on industries. He has written articles published in The Guardian, wrote the Forward to SAP Press' book titled "Mobilizing Your Enterprise with SAP", published over 3,000 articles and was featured as thought leader and digital strategist in the Department of Defense's IQT intelligence journal. Kevin lectures and leads workshops, teaches and consults with companies and government agencies around the world to help develop digital transformation and business strategies. Visit his website at C4DIGI.com.