The brave new world of mobile banking

P Venkatesh is director of the product division at Maveric Systems

It is hardly revolutionary these days to say that mobile has transformed banking forever. Clearly mobile usage is going to overtake online earlier than predicted. People check their mobile phone more than 150 minutes a day and mobile login share accounts for 72% of all logins on digital channels.Today’s Enterprise Mobility spends on BFSI amounts to close to $121 million, and is roughly estimated to be growing at 35% year on year. But are banks ready for this brave new world, a world where there are very few fixed points, write  P Venkatesh and Srivatsan TT.

Let’s see how mobile has changed banking at a fundamental level. Firstly, of all known channels it affords the most direct and instantaneous connection between the bank and its customer. Secondly, it has raised the ante for the quality of software that a bank deploys – customer experience, performance and width of services have become critical. Thirdly the ground-breaking technology that drives this segment, namely, location based services – has made the customer more self-sufficient giving him/her the ability to access and interpret data with minimal support.

Some interesting facts to consider:

• Mobile users have increased from 700 million in 2000 to 5.9 billion in 2010. But more importantly, there is a shift in terms of composition: while developed countries accounted for 71% of the base in 2000, developing countries accounted for 77% in 2010 (Africa being one of the largest). The developing countries are driving growth as well as innovation in this space. In fact a large amount of the development work in mobiles is happening in India, Taiwan, Malaysia and the Philippines.
• Customers control the scope, rate and complexity of features and functionality on offer in mobile more than in any other area of banking
• Growth rates and development are the fastest ever seen in the technology space: there’s a reason words like dynamic, complex and ever-changing are the norm when describing the evolution of mobility
• Very importantly, banks are waking up to the fact that their customer profile is going to change drastically in the next 7-10 years. Their ‘new’ customer base has technology hard coded into their DNA and will practically live their lives on mobile.

Srivatsan TT is vice president of the solutions group at Maveric Systems

These and other emerging trends on the technology and business front that make mobile a very unique channel also ensure that mobile testing is completely different from any other type of testing as experienced by banks and is not the same as application testing in any manner.

Let’s take a closer look at the key facts that impact mobile testing and assurance:

• Banks traditionally have had control over their environments – core systems, surround systems and upgrades. With mobile however the environments (devices, OS) are totally outside their area of control.
• While traditionally specifications were made with/controlled by the banks’ business users, with mobile specifications are dictated by customers
• There is no single community of knowledge; skills are fragmented. It has therefore become necessary to build new areas/communities of practice and capability. Organisations may need to move from centres of excellences  to communities of practices
• Introduction of new titles and roles relevant to digital are resulting in changes in banks’ organization structure.
• Business and dev ops are working together and are collaborating earlier than usual in the Mobility Assurance lifecycle. This is driving a higher degree of innovation and ensuring a smoother transition into production.
• Accelerated go-to-market is impacting every step of the assurance schedule
• Shelf life of applications is much shorter than hitherto experienced by banks
• New types of partnerships are emerging between banks and other businesses. for example-broad based programs driven by cross selling with telcos and retailers (integrated banking)
• Higher than ever use of open source
• Banks are investing in new areas like social media, as a platform for business. Social networking websites as payment network, mobile wallets, video banking and so on are of high interest.
• New types of vendors and service partners are emerging. Banks are working with smaller, nimbler, local and regional vendors and are adopting more flexible outsourcing models
• Like banks, vendors (service partners, tool providers) are equally caught up in the dynamics of delivering mobile assurance. Many of the services, tools and enablers they offer need to be approached anew.

It therefore requires a completely different mind-set, business model, operating model and partner eco-system to successfully manage mobile as a channel. Without this understanding testing and assurance in mobile is still going to take longer than it has to with release schedules getting adversely impacted. Since gaps in mobile assurance can downgrade their reputation, banks are paying an almost fanatic attention to the quality of build. Mobile being a mode of access as well as delivery, some of the focus areas for development include location based services, device to device integration, superior internet connectivity , imaging technology that combines visual and text, high performance apps and voice recognition.

However while development cycles have come down, testing and assurance cycles are still far from optimal. While the number of enhancements can be minimized for a cycle in development, the underlying layers between the mobile application and the mobile devices are dynamic and are rapidly changing. This includes operating systems, skins, browsers, device features and the devices themselves. This is what makes mobile testing & assurance complex, time consuming and critical. As a result, service partners to banks are now more focused on building integrated platform- led offerings which may encompass most of what is mentioned above. As a result complex environments, heterogeneous technologies, application mix, rapid life cycle models, service bundling (TaaS), hosted services, global virtual models etc. are being offered by service partners. Many mobile testing tools are available, but knowledge embedding in a tool/platform while understood as being crucial is still not widely available.

Maveric, being an assurance-only player with a deep focus on the verticals of banking and telecom that are the drivers of mobility today, has built a platform based on Model Based Architecture. This platform holds knowledge across various tiers – mobile application, operating system, skins, browsers, device features and devices. The knowledge tiers and the automated scripts enable assurance of quality while compressing timelines. Knowledge embedding, integration and being future-ready are the principles that drive this mobile testing and assurance platform.

To conclude, we would like to end with some food for thought in the form of questions – answers to which will drive banks’ mobile channel strategy and assurance for the next five to 10 years. Will banks favour bespoke solutions for mobile or will new standards emerge? What new geographies/regions will be in the ascendant and drive this space? Who will be the new competitors for banks and what will the new areas of competition be? What new businesses will become part of banking thanks to mobile? Who should a bank collaborate with, who will its new vendors be? Who will be the future decision makers? (This one we may know the answer to!)