Financial technology bloggers have written a lot recently about the implications of BBVA’s acquisition of Simple and Facebook’s acquistion of WhatsApp. I know, what does the WhatsApp acquisition have to do with FinTech? Industry pundit, Jim Marous, points out that the WhatsApp acquisition points to an ENORMOUS industry trend that sends a huge warning signal to all financial institutions. That trend, and this should be no surprise, is the significant shift for consumers from the desktop to the mobile device in not only social media, but in banking too. The warning signal? Consumers want to engage with their bank through the mobile device as the primary channel of engagement. Banks need to get their mobile house in order or customers are headed out the door, through the windows and maybe even through the ATM. The most salient mobile app feature that banks must get right to address this trend is account creation. Banks who make account creation easy from the mobile device will turn the tide …and will attract more customers away from banks who do not embarce mobile.
Marous sites, “While Facebook was built for the desktop and migrated to mobile, WhatsApp was built for mobile first, giving the network an advantage in today’s marketplace.” Similar to Facebook, a bank’s consumer products and user experience has been desktop based and is gaining momentum to migrate to mobile devices. I am a Wells Fargo user and have downloaded the mobile app that offers a snapshot into my bank account online. Aside from remote deposit capture, the application offers very little additional value that leverages the power of my mobile device. As I’ve mentioned in previous blog posts, there are many FinTech innovators who are creating banks and banking technology that put mobile first. GoBank, Moven and Simple are prime examples.
The most significant opportunity to drive mobile banking adoption is to fully leverage the camera feature on a smartphone. Yes, most banks do utilize the camera by enabling mobile deposit capture and photo bill pay. However, the camera needs to be enabled for a much more significant functionality: The ability to capture the PII needed to open a bank account without asking the consumer to key it in using a device key pad. Without this feature, the mobile channel will always be secondary to the online banking channel where consumers create and manage banking relationships.
Financial technology innovators Jumio and Mitek are making great strides in leveraging the device camera to capture customer data. Jumio recently launched at FinovateEurope a technology that uses the device camera to scan an ID and extract the needed PII to open up a banking account. The technology then “deposits” this needed data into a bank account registration form. Wow. Cool. The technology addresses the significant consumer pain point of using a tiny device keyboard to open up an account ….which is a process filled with typos, frustration, and high abandon rates. The Jumio platform makes opening a bank account fast and easy.
The mobile camera ID scanning technology sounds great…however, from the consumer perspective I can identify several potential hurdles or concerns that have to be addressed. Where does the picture of the scanned ID go? Is the image in my device photo stream? If I lost my phone, could the thief see this data? If the ID image lives in a cloud, who’s cloud is it? What happens if the cloud provider is breached? There are so many questions here that need to be addressed! One thing is for sure, innovators need to have the data security technology locked down and messaging at the ready to educate customers on why this ID verification technology is safe. After all, consumers don’t readily distribute copies of their ID to just anyone offline…and it’s no different in the online world.