Why Banks Should Be Investing In Mobile Apps
I had the chance to speak to Steven Deakin, Director of Business Development at StrataPrime. Steven was formerly Global Head of Mobile Applications and Platform Services at Barclays, where he was in charge of delivering mobile solutions to the company.
Steven gave me great insight into the challenges and opportunities to adopting mobile apps faced by banks. He also talked about some of the interesting enterprise app use cases that he has seen in banking.
Here is what I learnt.
Banks are among the most heavily regulated industries in the world. Because of this, adopting enterprise apps for banks has been a great challenge for many who worry that apps may cause security and data breach issues.
As a consequence, any app running on a personal or corporate mobile device of bank employees must be heavily secured to ensure that there is no data leakage.
Overall banking is a generally technology savvy industry where employees are keen to introduce mobile apps into their business processes. It is therefore imperative that security and other challenges are overcome to enable banks to achieve higher levels of productivity and to gain competitive advantage.
There is also a split in technical ability of a bank workforce mainly driven by role. For instance, in the retail world we find both tech-savvy employees and an more traditional less tech-savvy employee base.
An added challenge will therefore be to help encourage some of this more traditional demographic to change the way they work. Strong marketing and training campaigns must be run when adopting new mobile apps; otherwise programs and projects will be doomed to fail.
Some real life business cases
Despite these challenges we have already begun to see some interesting use cases in banking that are bringing great benefits in terms of saved costs and extra revenue generation. So far, the main banking areas served by apps have been sales and productivity.
- Credit card sales app. One of the ways in which banks sell credit cards is by going to places like shopping centers and motorway service stations and selling to the general public.
Historically, this was done by setting up a table with a laptop and working offline. This meant that, at the end of the day, sales staff would have to spend two or three hours getting back online, uploading work, correcting mistakes and typing paperwork up.
Credit card sales apps have allowed this process to move to a corporate tablet such as an iPad, so that sales staff are now able to move around more and to show customers their product more easily. This makes the sales process feel smoother and less intrusive to potential customers, leading to higher sales and revenue.
At the same time, staff are now able to work online and to deliver live updates via a VPN connection. This means that information can be uploaded and corrected immediately, reducing the amount of extra work that has to be performed at the end of the day and thereby increasing productivity.
- Mortgage sales app. Mortgage sales apps are another great example of a sales app for banks. This kind of app, however, is generally used within branch.
Normally, a client enquiring about mortgage plans would be taken into a meeting room, to a desk with a computer, where they would be shown the product in quite a static setup.
Using an app makes this into a more dynamic process by allowing staff to be more open with customers, sharing the screen of their corporate tablet and offering a more visual experience.
Although introducing tablets into all branches of a bank can constitute a very high cost, the benefits are immense, and in some cases apps have been reported to double sales. Therefore, introducing apps to support mortgage sales can have a huge impact on additional revenue generation.
Finally, banks are also adopting apps that help increase internal productivity, therefore reducing costs.
One example of this is reporting apps. At the end of each day, Branch Managers will normally have to fill out reports about how their branch performed that day.
This has traditionally been a paper-based system, whereby a report would be filled in pen, scanned and then emailed over. Overall this process took around 30 minutes.
Now, some banks have begun using basic Excel-based apps that allow Branch Managers to easily fill out forms on their tablet and hit the send button within 5 minutes.
Although this might only lead to a limited amount of saved time per manager, a firm with 1,500 branches will be saving 625 hours per day, resulting in 3,125 extra working hours a week. This is a huge increase in productivity by anyone’s standards.
Challenges of apps for banks
This kind of success, however, has been hard to translate to other areas of banks because of the challenges faced.
Security is the greatest concern stopping banks from adopting mobile apps. Because of the large volumes of sensitive data and information that banks deal with, this comes as no surprise.
Banks have dealt with security concerns in several ways. One of these is their partiality for traditional corporate devices. These devices have actually constituted both a strength and a weakness for many banks.
Their greatest strength is precisely what has attracted many banks to adopt them as the device of choice: the ability they offer for their security layers to be opened and for different functionalities to be turned on or off.
From a security perspective, this has been of great appeal to banks, as it has enabled them to use secure devices stripped down to their most basic functionalities.
However, it is exactly this that has led to their greatest weakness: These devices simply do not offer the “full experience” that other devices do. This means that employees often feel limited by their corporate devices compared to their personal devices.
Users end up with a device that doesn’t provide a full experience that they experience on their peronal device. I want to see employees benefit from the full rich experience they are used to. – Steven Deakin, Director of Business Development at StrataPrime
This leads to an inability to get work done in the way that employees are used to, losing great opportunities for increased productivity that are offered by mobile apps for banks.
By holding colleagues back from rolling out more internal mobile apps, banks may be missing out compared to competitors able to move faster in adopting mobile.
Security teams at banks will therefore have to find the right balance between a more pragmatic approach and still maintaining high security levels.
For instance, banks have traditionally produced a security profile to cater for the highest risk and most regulated employees, such as Front Office Traders, and applied ir to the whole workforce. Moving forward, profiling your workforce and applying tiered security levels will allow a richer experience for the 80% – 90% of the organization that aren’t bound by those regulations.
By holding colleagues back from rolling out things like mobile apps internally, firms are losing competitive edge over competitors who are embracing the mobile revolution. – Steven Deakin, Director of Business Development at StrataPrime
The second greatest concern for banks, and one partly derived from security concerns, is cost.
Even within large organizations with internal development teams, developing apps for banks is expensive business. This is partly to do with the basic costs of designing an app, and a lot to do with the costs of ensuring that there is no security leakage.
For every app created, development teams will have to design the app, wrap it securely, release it, support it and put it through penetration testing. Penetration testing alone can cost up to £15,000.
As a consequence, most large firms need to prioritise what apps get designed and to ensure that every single one of them either drives efficiency or generates extra revenue. A great deal of apps proposed therefore never see the light of day.
Although this means that all apps for banks developed are of great value, it also poses challenges to employees by preventing them from working in whatever way is best for them.
The challenge is to move from these sort of closed environments to more open ones where apps for banks can be delivered with more pace.
One way of doing this would be to empower departments to develop apps internally, using software such as app builders. This would help reduce overhead and internal costs, make app development a more agile process.
Security will never cease to be a concern for banks but as users become increasingly used to using personal devices with full functionalities, banks will need to find alternative ways of dealing with security challenges in order to accommodate their employees’ ways of working.
There are many companies today, such as Good Technology, that offer great security solutions. These wrap apps into a security wrapper that ensures that there are no security leakages.
By using such solutions, banks can also begin to enable employees to use their own devices, which they will be most used to. Not only will this lead to more optimal ways of working for all employees, but it could also lead to significant costs saved in device and carrier costs.
Banks could instead provide strong support services for employees, helping to set them up with the right security solutions and assisting them with any technical issues that they may have.
We are moving towards a new work order where being mobile is increasingly becoming a primary rather than a secondary mode of working.
As we move towards a mobile-first way of working the technology we use is increasingly being dictated by employees rather than by organizations.
This is bringing great benefits by ensuring that employees work in whatever way is best for them, leading to increased productivity and more optimal workflows.
This change from IT-led to consumer-led technology uses in the workplace is bringing radical changes, for the better, to the way we work.
In order to accommodate for this, enterprises such as banks are going to need to find ways to overcome whatever challenges are in the way of their employees fully benefitting from these changes.
Whether security or cost issues, the way banks deal with these challenges needs to be turned on its head and aim to empower rather than to limit their employees.