September 27, 2013 | Published in Banking Frontiers
“The PC Wars are over. Done. Microsoft won a long time ago.” - Steve Jobs. Fortune, Feb. 19, 1996
The above statement from Steve Jobs aptly summarizes the fact that in the modern world, efforts are being put in newer channels in addition to those applied for improving desktop technology; customers are expecting smarter functionalities on their mobile devices to simulate at least a subset of the functionality offered by their desktop counterparts. The increased demand and supply of the smartphones and tablets confirms this trend. Mobility has become an important technological area not only for the common man but also for the Multi-National Companies who want to leverage the solutions for automating a host of their operational features. Morgan Stanley Research predicted the number of mobile internet users to be at par with the desktop internet users by end of 2013. However, the former has surpassed the latter much earlier than the predictions – signs that ‘smartphones’ are the preferred line of internet operations.
The conventional desktop systems face challenges such as accessibility and turnaround time. Moreover, the implementation and support function is larger and the time involved for ‘Go Live’ is longer. Our research also shows that executives who are mostly travelling do not have instantaneous access to official information and hence require smart phone applications to assist them in completing critical tasks while on the go. E-mails, messengers and social networking are all areas where mobility has come as a life-line allowing ‘on-the-go’ access to users. The mobility product implementations require smaller amount of time for the implementation and have a smaller ‘time to market’. Moreover, the post-implementation support also requires lesser investment in man-power and infrastructures.
One area where mobility has had a positive response, especially in the developing geographies like Africa and Asia, is the ‘Banking and Financial Services’ sector. The banking mobile applications are among the most downloaded applications in the leading market spaces of various operating systems. The core areas opted by financial institutions to deploy mobile banking solutions include: Payments & Transactions, Customer Self Service, Utility Bill Payments, Credit Card Payments, New Customer Acquisition, Analytics and Debt Recoveries. Banks are now open to ideas which involve their integration with smartphone applications so as to quicken the whole process and hence underline their customer service. Most mobility products (for the BFSI Sector) are, hence, developed to integrate with the base desktop systems and work in tandem with them. BFSI software vendors are also following an approach to develop mobility platforms, independent and compatible with any desktop system so as to promote maximum value propositions for their products. The product line is developed after extensive research and the product functionalities are hence comprehensive and require minimal customizations which are mostly specific to the client. The lesser ‘time-to-market’ involved in the implementation stands out as a key characteristic of these solutions.
The most important component of implementing the banking mobility solutions piece is the security aspect. Since most of the data is transferred over air, security is assumed to have the topmost priority. It is the joint responsibility of the customer and the partner to ensure that all compliance requirements are met and that the product encompasses robust security checks, wherever necessary to protect customer data and other vital information. Financial institutions in India have already come up with stringent security guidelines that are dovetailed with the ones released by RBI and hence help the institutions practise the concept of a high level of security with respect to the mobile applications. For instance, since most mobile applications are mapped with the handsets, losing the handset and subsequent deployment on a new handset requires a full registration again as a security measure. Such practices may occasionally appear time consuming and mundane, but the financial institutions are unwilling to take any risk with respect to this functionality. Moreover, gradually the end customers also understand that the process is worth the time (of re-registration) and hence prefer to follow the steps involved in the cycle.
With respect to application development, the response from leading IT product organizations has been promising. Seasoned players such as Nucleus Software have also adapted well to this market. Being one of the very few IT product companies headquartered in India, Nucleus Software, in addition to its IBS top ranked Lending Suite, FinnOne™, has developed three mobile applications capable of Customer Acquisition, Self-Service and Debt Recoveries. Customers of Nucleus Software have responded with confidence and have been delighted with the rapid rate at which these solutions can be implemented through integration with the existing desktop based systems. The result of using these applications have helped institutions automate various existing lending processes and hence made them more compliant and at the same time strengthened their brand image in the market. Nucleus Software’s live interactions with the end-customers of the financial institutions have been promising as well – the significant improvement with respect to turnaround time as a positive improvement over the previous processes has been well received. Market reports show that Android Operating Systems is well on its way to capture the smartphone mobile market and hence the Android Play Store is host to a number of mobile banking applications that have come up recently. Trends like these prove that the IT vendors are observing the trends from close quarters and responding with specific products as per the market needs.
Smaller players have also embraced the concept of mobility and started developing mobile applications which cater to the needs of financial institutions. Banks and NBFCs perceive these as extremely efficient investments since the turnaround time is very low and subject matter expertise required is relatively less. These vendors have crafted user friendly interfaces, customized to the theme preferred by their clients and hence captured a fair share of the markets. Since the support and implementation function requires less investment, the companies have really done well in adding top banks to their list of clients.
The rapid expansion of this concept among the Banks and NBFCs of the country is steadily growing. Just like internet banking, customers may take some time to adapt to the concept but will eventually be buoyed by the convenience it offers and hence will only be motivated to undergo stringent security checks to unleash the power of the mobility services offered by their banks. The technologies on the mobility front change rather quickly, as compared to their desktop counterparts - this expects the developers to stay abreast of the trends so as to scale up their products to the current market requirements.
The road ahead for mobility as a channel for banking and financial services looks promising owing to the response showcased by customers. Comfort of servicing requests while on the move have exponentially increased their levels of satisfaction – We, at Nucleus Software, work closely with our customers to understand and deliver solutions that cater to such preferences showcased by the users and as always, deploy a high level of expertise from conceptualization to fruition during product development in order to give a superior experience to our end customers for a lasting relationship.
-Pratik Munjal is a Business Analyst-Mobile Products with Nucleus Software.