Is the banking industry prepared for another wave of innovation in response to Apple's introduction of the iPhone 6s and 6s Plus? We asked several industry pundits for their take on the latest announcements from Apple.
If you weren’t able to sit through the latest 2-hour Apple new product presentation, it’s understandable. It’s usually easier just to read the reviews that start to appear only minutes after Tim Cook leaves the stage and the auditorium clears.
In a nutshell, as many had predicted, there were sales recaps and customer satisfaction ratings, new fashion and app partnerships for the Apple Watch, a huge 12.9″ iPad Pro (along with Apple Pencil), some exciting enhancements to Apple TV, and details about the upcoming iOS9 upgrade. But most in the audience, and any banker listening to the simulcast, were most interested in the new Apple iPhone 6s and 6s Plus.
While the look of the new phones are similar to the last-generation iPhone 6, the ‘s’ versions were redesigned with better specs and a more complex ‘3D touch’ interface. 3D Touch enables the phone user to expand functionality of their phone by moving their finger up and down, left and right, and by applying more pressure.
When the user presses a little harder in their 6s or 6s Plus, they get what’s called ‘Peek’– a pop-up of the contents of an email, the status of a flight, or a quick way get directions when tapping on a map. If the user presses harder, they move to the ‘Pop’ stage. This enables the user to move to a new place in the operating system. The user can also press the icons on the home screen, jumping to some applications without opening the iPhone app.
Apple-Driven Banking Innovation Opportunities
In the past, the banking industry has moved in sync (with varying degrees of delay) with smartphone technology upgrades. From leveraging the camera OCR functionality for depositing checks, opening new accounts and paying bills to improving security with the Apple Touch ID capability, banking has benefitted from the innovations of the smartphone industry.
So how can the banking industry leverage some of the enhancements to the new iPhone 6s? More specifically, how can banks and credit unions enhance the customer experience with the improved Touch ID, 3D Touch and the enhancements to the camera on the iPhone 6s and iPhone 6s Plus?
We asked some of the leaders in global fintech for their opinions.
Mobile commerce and payments lead at Experian Global Consulting.
“I see 3D Touch – the ‘Peek and Pop’ gestures enabling opportunity for more convenience and UX in banking apps. These new interactions can reduce friction, and bring to the surface features that were previously inaccessible for consumers – or simply difficult to understand and use. The challenge for banks will be to embrace these new interactions as quickly as have others (e.g. Facebook) and decide on what features make the most sense.
The stated hardware improvements to TouchID 2.0, along with the iOS9 additions, are expected to drive a balance between security and convenience. And Apple seems to be very clear about its direction in relation to the whole debate between mobile web and apps – with no browser on watchOS or tvOS. 3D Touch and deep linking between apps drive a far smoother experience for the consumer compared to the clunky web. That’s a lesson for banks who still can’t make up their mind between web and apps.
The larger impact may be that Apple is now in device financing. Through their partnership with Citizens, they are now in lending. That’s a bigger news item than all.”
“The 3D touch and camera improvements in the iPhone 6S have two immediate applications. First of all, the Facetime camera can now be used with consistency for facial recognition in improved identity verification processes on mobile. The 3D touch could produce some great innovations including use of 3D touch for things like an instant balance check, last receipt check, P2P to favorites, etc.
As the technology in these devices improve, the ability to reduce customer experience friction, while also improving security and reducing fraud, is incredible. In reality, most banks still haven’t got even basic account opening on mobile, so the likelihood of this producing rapid improvements in experience in most banks is unlikely. The finch ‘disrupters’ will most likely be the first to really leverage this technology.”
Head of innovation at Santander, N.A.
“While Apple talked about the new Apple TV being led by a world of new apps, it’s becoming clear that Apple is readying itself for a world without apps, at least in how we think about them today. And, it’s interesting to see technology like 3D Touch help us derive value out of apps without launching them in the first place.
Much like the Apple Watch, the more functions we can tease out of our applications without having to actually launch the full program, the better. I can envision a quick 3D touch of the app for balances, finding a branch, perhaps even money movement or bill pay.
Apps that enable contextual assistance and simplified transactional banking at a glance – perhaps with an added authentication through TouchID – will make new functions as easy to use as Apple Pay. In a world of context, we can come in and out of our customer’s lives at the right time and the right place. The new Touch 3D will simply make this easier.
The enhanced camera, will make consumers even more aware of the enhanced OCR capabilities, increasing the understanding of the integrated benefits of mobile check deposit, photo bill pay, but potentially the details of goods that we wish to purchase.
Finally, with a more powerful Apple TV, imagine consumers thumbing through their financial portfolio on an even bigger screen, juxtaposed by live stock market feed and a series of news items related to their investments. This could also be a place where a consumer can blend content from video to education appropriately on varying complexities of financial topics.”
Director, Innovation and Insights, Fiserv
“The banking apps have a great opportunity to update their look and feel to wow the users on how to better engage in banking activities. Most sections of a typical banking app can now be designed with deep linking within the app to come up with some cool use cases like:
- Checking your Balance without opening the app (use 3D Touch)
- View the last few transactions
- Show an image of the last check which posted/cleared
- Show how many more days you have before your next paycheck arrives
Banking apps can also include functionality to ask the users permission to create calendar entries that remind them about bills and payments which are due by a specific date … and then Siri can remind them of those upcoming bills … maybe while watching a show on Apple TV.
By tagging the right keywords within the app, an app could also prompt users with links for mobile-based account opening, auto loans, mortgages, calculators etc. This way, when the user starts typing in the phone search box or asks Siri a question, an appropriate banking app can take precedence in showing your product.”
A member of the international Think Different Group.
“The Apple event for me was a bit of a mixed bag. While nothing seemed ground breaking to me with the iPhone changes, there was additional momentum and enhancement to a number of functionalities introduced with the original iPhone 6 and other Apple products.
At the most basic level, we are going to see a huge number of iPhones 6s and 6s Plus devices flying off the shelves. While that seems like a normal year in the life of an Apple product, this is the first year that its organically expanding the reach of ApplePay.
Phones passed down will expand the base that can use ApplePay, with husbands/wives and kids inheriting previous phones. This will expand the potential for ApplePay use exponentially.
Use cases for optical character recognition will continue to expand with check deposit, personal identification, and other current uses, being just the start. The more enhanced camera will bring deeper sophistication while not really necessarily ground breaking.
The 3D touch capability, while probably not making massive waves with the majority of traditional banks, will open up unique opportunities for innovative start-ups and progressive FIs to deliver functionality not possible with Android and Windows apps.
Outside of the iPhone, the Watch OS2continues to show potential for innovative fintech firms. Apple Watch ‘3rd party compilations’ could easily lend itself to being able to see bank balances or financial performance at a glance on a consumer’s wrist with no login or need for a bank app opening.”
The opportunity for a new wave of innovation based on the latest Apple introductions is apparent. The question is whether developers will choose to integrate the new capabilities to enhance the customer journey by reducing friction, improving design and increasing functionality.
Many financial organizations have leveraged the advanced technology associated with the iPhone 5s and the iPhone 6 to increase security and convenience of mobile banking in the past. This has resulted in increased enrollment and use of mobile banking and led to increases in expectations from digital consumers.
It all gets down to prioritization of investment in technology and mobile banking. For some organizations, there are much more important priorities for the upcoming months. For others, the newest wave of Apple introductions provides the opportunity to differentiate … if only for a short time.
Whatever the strategy may be for the future, banking organizations need to come to the realization that other industries are setting the bar higher and higher for all of us.