More than mobile banking: How mobile is driving innovation in the financial sector
Mobility has disrupted a number of industries, but the marriage of new technology to the financial sector, in particular, is extraordinarily innovative. Though the financial market is evolving through the use of mobile devices and mobile applications that offer full banking services, these innovations extend far beyond mobile banking.
You’ve undoubtedly seen the rise in popularity of digital wallets as part of consumers’ mobile banking portfolios. Apple Pay has captured most of the headlines — its near-field communication technology lets you pay for transactions at supporting retailers by simply tapping your phone and using your thumbprint to authenticate and authorize the transaction. Competing service Google Wallet works in a similar way.
Financial markets find themselves evolving their mobile strategies by force with these mobile payment systems. They’re either supporting this technology and building on it or finding themselves cut out of transactions in favor of anything that makes payments more seamless for both customers and merchants. Mobile payments and transactions have moved the financial industry from relying on paper checks and card swipes — with their inherent fraud problems — to secure, instant payments that use technology customers generally already have with them.
Along the lines of devices consumers have with them, mobility plays an increasingly important role in the adoption of biometrics. Instead of requiring intrusive retinal scans and DNA swabs or requiring special hardware and digital tokens, customers can simply use their thumbprints within mobile banking apps to authenticate transactions. They can even begin cash withdrawals and money transfers on their phones or tablets and then complete them securely once they reach an ATM or branch location.
Rather than showing a teller two forms of identification and remembering a PIN, financial institutions can simply tell their customers to use their fingerprint at their convenience, increasing the mobile ROI those companies enjoy.
The rise of the financial technology sector
As mobile devices have become more popular and development for mobile platforms has become richer and more full featured, there has been a rise of financial technology startups. This sector, dubbed “fintech” for short, is innovating in a variety of ways: from extending payments and remittance services to providing loans and deposit accounts outside traditional bank charter and holding companies.
Other companies use the data from your bank, including purchase histories and locations, to offer proactive financial advice and deals on a push-notification basis. This adds value while resting on top of one’s existing mobile banking relationships. These FinTech companies are using the pervasiveness of mobile devices and the rich capabilities of the devices themselves to sidestep the traditional buttoned-down banks and offer direct-to-consumer services. These services drive a level of innovation that is not traditionally seen in the financial space.
As more technological innovations are released into the financial industry, it’s clear this evolution will continue to fascinate the world.