Mobile phone cannot replace bank branch

A future without cash? Many people can well imagine this and are ready to carry out corresponding financial transactions soon only via mobile phone. Nevertheless, hardly anyone wants to do without personal contact with the bank advisor. Omni-channel banking is the recipe for success for financial institutions.

This is the result of a current study by GFT Technologies AG. The global IT solution provider for the financial sector surveyed around 900 people in Brazil, Germany, Great Britain, Spain and the USA.

Customers use different channels

By 2017, it is expected that one billion people will be doing their financial transactions via online or mobile banking. “In the future, the mobile banking options will be decisive for which institute the customer chooses,” emphasizes Marika Lulay, Chief Operating Officer at GFT. “Traditional banks will clearly feel the pressure of competition from direct banks and providers of electronic wallets or in-app payment options.” A clear result of the study: The key to success is omni-channel banking. Because customers use different channels in parallel: smartphone, tablet and PC. Banks are therefore faced with the task of coordinating and integrating the various processes with one another.

Fear of fraud and security vulnerabilities

In addition, the GFT study reveals serious differences between the countries: While more than 60 percent of those surveyed in Spain and Brazil already use mobile banking, German customers show a clear reluctance to accept new offers. Only 26 percent use the smartphone for banking. “If the customer succeeds in relieving the fear of fraud and security breaches, this number will surely increase,” Lulay expects. In addition, more than half of those surveyed do not want to do without their bank branch entirely. A personal contact person is particularly important for large-volume transactions or loans. The situation is different with transfers, withdrawals or checking the account balance: According to the study, the classic branch will soon be obsolete.

Illustration: Acceptance of mobile banking in an international comparison; Source: GFT

Check which branches should be kept

“We are in a transitional period,” says Lulay and therefore recommends banks to combine different sales channels at the same time into an integrated offer. “It is important to check which branches should be retained and then to make them fit for the future with the help of a rich interactive and entertainment offer.” Various pioneering branch concepts are described in the study for suggestions: For example Q110 – the Deutsche Bank of the future, or San Francisco’s first ING Direct “Banking Cafe”, where you can open a new account with a cappuccino.

When it comes to security, the study points to clear shortcomings – both in terms of protecting smartphones and password management. The mobile authentication method NFC-TAN developed by GFT together with the University of Tübingen increases security. And speech recognition – highlighted in the study as an important future trend – GFT implemented a speech biometric prototype.

(GFT Technologies AG / asc – Photo: Postbank)