An 'Everyday Bank' has to be mobile


Simply creating mobile-friendly versions of existing products and services will not be enough for banks to fend off challenges from non-bank competitors, such as PayPal, Google, Amazon and Square.

That is the conclusion of a new report (.pdf) by Accenture on digital banking. If banks fail to take the lead on mobile and other digital technologies, they could relegated to being "utilities" for non-banking competitors to generate revenues from.

"Banks will need to move beyond their traditional role as enablers of financial transactions and providers of financial products and play a deeper role in the digital and commercial lives of their customers"--a strategy that Accenture terms the Everyday Bank.

On the mobile payments front, banks face stiff competition from non-bank competitors. Currently, PayPal has 120 million digital wallets in use worldwide. Google offers a plastic debit card to go with its mobile wallet, and T-Mobile has rolled out a mobile wallet service in the U.S. market. And half of Square users in North America would consider using Square for banking services, according to an Accenture survey.

Banks understand these challenges. According to a survey of bank leaders conducted by Accenture in late 2013, they cite "new market entrants" as one of the three biggest risks they face in the year ahead.

So what's a bank to do? "Banks cannot respond to threats simply by 'being more digital'--closing down branches and rolling out better mobile and online banking services. To defend their position, they must learn to play a greater role not just at the moment of the financial transaction, but before and afterwards, as well," the report advises.

One example of this approach is a mobile app launched by Turkish bank iGaranti. The mobile app incorporates mobile payments, personal financial management tools, location-based discounts and other features to help its customers manage their finances.

To become an Everyday Bank, banks need to extend their ecosystem of partners, master analytics, embrace omnichannel customer interactions and create a digital core infrastructure.

"Banks have an opportunity to emerge much stronger by embracing the digital revolution and reinventing themselves. As that revolution increasingly disrupts the competitive landscape, they may need to move quickly," Accenture concludes.

Mobility will be a key aspect of the Everyday Bank strategy. If banks want to avoid becoming transactional "utilities," they need to move fast and be mobile. - Fred