Innovation, Revenue Creation and Mobile Solutions in Retail Banking

BAI just wrapped up its conference on retail banking and delivery channels. Here are the reflections from one attendee, who says the future hinges on digital, mobile and innovation.

As with any trade meeting the magnitude of BAI’s Retail Delivery Conference, every person comes away with a different experience. Here are my takeaways from the week.

A Digital Revolution

I realized how long I have been in this business as soon as I hit the expo floor. I go back to much simpler days when trade shows were filled with display vendors (brochures and signs, not video), checking account premiums (from teddy bears to pots and pans), newsletter publishers (the paper kind) and cash counting machines.

This year, even though there were a few high tech riffs on traditional themes, the majority of vendors were dwelling on four central ideas:

  • Capturing and leveraging big data
  • Multichannel delivery (mostly mobile)
  • Improving digital security
  • Enhancing the customer experience

The digital reality dominating the banking landscape clearly intimidates some vendors. There are vendors who have participated in BAI for years  who now promote products and services well outside of their traditional areas of expertise. Unfortunately some are slinging so many buzzwords at so many objectives that I can’t tell exactly what they were selling. Maybe they weren’t quite sure either?

America Isn’t the Hotbed of Innovation. The Best Ideas Come From Overseas

While not widely attended or discussed, the BAI-Finacle Global Innovation Awards presentation drove home the notion that the most exciting developments in retail banking are found outside the U.S., in countries like Australia, South Africa, Singapore and Germany — even Poland and Turkey.

Congratulations to FNB from South Africa for being named “Most Innovative Bank in the World,” partially for their development of a fully functional eWallet. Two other winning organizations — Alior Sync from Poland and DenizBank from Turkey — were recognized for banking platforms that integrated Facebook. Digital payments are clearly the future.

For future conferences, the folks at BAI should consider holding the Global Innovation Awards event as a general session. Banks in the states need to see how to step up their game. What better way to challenge stale American thinking than with these scrappy international innovators?

Debit and Prepaid Cards Are Alive and Kicking

A white paper from Vantiv on the top 10 payment trends.

In one of the full day workshops, several industry leaders discussed the proactive management of debit and prepaid payment options. Not only were the economics of these products discussed, but also the opportunity for enhanced revenue through increased customer engagement. Emphasis throughout the workshop was placed on customer segmentation, specifically because the market for each type of product is so demographically different, and on the importance of building independent business models for growth. A bonus for participants in the debit/prepaid session was Vantiv’s Top 10 Payment Trends to Watch, a 16-page downloadable white paper.

Show Me The Money

The “Monetizing Mobile” and “Monetizing Social Media” presentations zeroed in on one of the conference’s primary themes: revenue generation. (Many of this year’s BAI sessions focused on revenue potential when a particular strategy was presented, which was a welcome improvement over years past.) In the mobile banking presentation, Matt Wilcox from Zions Bank and Drew Sievers from mFoundry explored 14 categories of revenue associated with mobile banking engagement. In the social media session, Frank Eliason from Citibank, J.P. Nicols from Clientific and Steven J. Ramirez from Beyond the Arc, discussed the importance and value of social media interactions. They illustrated how progressive banks are moving beyond viewing social media as simply a customer service or research tool, to leveraging interactions with predictive analytics to identify new business opportunities and improve customer loyalty.

Innovate or Perish

Okay, so maybe it isn’t quite that dire. Maybe there will be a place for “fast followers” in the near future. But all of the keynote speakers, as well as many of the summit sessions and expo presentations, emphasized the importance of innovation as a core business strategy. From Virgin Money founder Richard Branson’s opening day keynote where he emphasized his enjoyment of playing “David” against more heavily-financed and slower “Goliaths,” to Guy Kawasaki’s presentation on the “Art of Bank Innovation,” to Jonathan Salem Baskin’s presentation on gamification, it was clear that banking will be changing at an even faster pace in the future.

Is That a Bank in Your Pocket?

From the multichannel session track to the expo floor, banks are looking for ways to encourage transaction channel shift at a pace that keeps up with smartphone and tablet technologies. There has been much discussion about the demise of branches as an outdated and outmoded channel, but based on what I saw at BAI (or didn’t see, to be more accurate), the same kind of feelings are now starting to develop towards online banking, the erstwhile champion of channels. I did not see any technology presentations without an iPhone or iPad becoming the focal point, when in years past desktop banking was always the hero.

Banks and credit unions that have been slow to develop mobile applications need to wake up: hand-held devices represent the future of transactional banking. The importance of this is magnified if Carl Tsukahara, CMO at Monitise, is to be believed. In his presentation on mobile wallets, he predicted that the digital wallet wars will be over in two years. He warned attendees that banks can’t afford to sit on the sidelines.

Getting to Know You

Thanks primarily to social media channels like LinkedIn, Facebook and Twitter, you can really “know” someone you’ve never met. This was the norm at this year’s conference. More than a dozen times, people approached me and introduced themselves while saying that they “knew me” online. This level of familiarity drove many bankers and vendors to seek out virtual peers like Shevlin, Pilcher, Cooke and Leimer.

Interestingly, there was an impromptu meet-up hosted by Steven Ramirez from Beyond the Arc, attended by others who had never met face to face before, including Jeani Winterbourne (Umpqua Bank), Melanie Flanigan (Yodlee), Scott Mills (William Mills Agency), Matt West (MoneyDesktop) and J.P. Nicols (Clientific).

Next year’s conference will be held in Denver, and I am sure it will bring even more energized attendees, industry leaders and innovations. I’m definitely looking forward to it!

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