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  • An Oracle White Paper

    March 2013

    Rethink the Mobile in Mobile Banking Disruptions and Innovations in Mobile Communications Technology

  • Rethink the Mobile in Mobile Banking

    Executive Overview ........................................................................... 1

    Who is Leading Innovations: Manufacturer or Consumer? ................. 2

    Is the Mobile a Handheld Device? ............................................... 2

    Call or Do: Unlocking New Avenues ......................................... 2

    Is it a Phone or an Identity Card? .................................................. 2

    From Consumer-Aware to Context-Aware ......................................... 3

    Implications for the Banking Industry ................................................. 4

    Who are the Competitors for Banks Today? ...................................... 5

    Who Owns the Customer? ............................................................. 5

    Where Banks Hold an Edge .......................................................... 5

    Strategic Opportunities for Banks ...................................................... 6

    Redefining Take the Bank With You ............................................ 6

    Who Needs Cash or Cards Anymore? ........................................... 6

    Personal Financial Advisors at Your Fingertips .............................. 7

    Can Mobiles Facilitate Financial Inclusion? ................................... 7

    Delivering Full-service Corporate Mobile Banking .......................... 8

    Conclusion ........................................................................................ 9

  • Rethink the Mobile in Mobile Banking

    1

    Executive Overview

    As mobile device technology evolves from being device-driven to consumer-driven, we are

    witnessing a corresponding shift in the consumers outlook towards the usage of mobile

    devices. In the earlier days, the consumer would feel overawed by the impact of technology

    and could be easily satisfied with the simple promise of convenience. Todays consumer,

    exposed to unprecedented levels of information and awareness, is becoming more and more

    demanding by the day. The average mobile device user is not swayed by the bundle of

    services being offered on his device; he now expects service providers to push the envelope

    continuously, leading to the age of consumer-led innovation.

    The evolution of mobile device technology and the consumers expectations has had a

    significant impact on the banking industry. With non-banking players venturing into the realm of

    mobile payments, wallets etc., the consumer is spoilt for choices. However, with the mobile

    payments industry still in a state of flux, ambiguities remain in terms of regulations, cross-

    border transactions, and most significantly, ownership of the customer. To survive the

    onslaught of non-traditional competitors, banks need to ramp up their capabilities to service the

    connected and aware consumer.

    This whitepaper examines the current trends in the mobile banking sector, placing emphasis

    on the disruptive innovations that are altering the global banking landscape.

  • Rethink the Mobile in Mobile Banking

    2

    Who is Leading Innovations: Manufacturer or Consumer?

    Over the years, mobile communications technology has evolved from being device-driven to user-

    centric. In the past, the customers usage of a mobile communication device was restricted by the

    devices capabilities. However, with the evolution in technology, the device no longer dictates the user

    experience. Instead, it is the other way round; the users expectations now drive the devices

    capabilities. Increasing computing power, scalability of operations and the increasing interaction

    between the device and the user have led to innovations such as voice-activated assistants, mobile

    handsets with built-in projectors, wireless battery chargers etc., which are continuously redefining the

    way we use mobile devices.

    Is the Mobile a Handheld Device?

    Traditionally, the form factor of the device was dictated by the technology to be fitted inside the

    device. As mobile device technology evolved, the form factor and the size ceased to be constraining

    factors, and devices became progressively lighter and smaller. Lately, the very idea of the mobile being

    a handheld device is being challenged by the emergence of wearables, which are redefining the concept

    of the form factor for mobile devices. As current handheld form factors disappear, interfaces delivered

    via glasses or contact lenses, microscopic earpieces and devices as unobtrusive as the ring on a finger

    will emerge. Even among traditional mobile devices such as smartphones, new form factors such as

    flexible and foldable displays are emerging.

    Call or Do: Unlocking New Avenues

    The initial stage in the development of mobile device technology restricted itself to offering improved

    customer convenience, within the confines of the pre-defined functionality of the mobile device

    communication. Most innovations focused on delivering a faster and more convenient way for the user

    to communicate. As mobile networks became ubiquitous, call rates reduced and mobile

    communication became the preferred mode of communication. As consumers started to spend more

    and more time with their mobile devices, they were no longer content with the mobile device

    performing the basic task of communications. The user today expects the mobile device to perform all

    the functions of a PC. The smartphone and tablet boom has transformed the mobile device into an

    interface through which the consumers can engage with the service providers in real-time and with the

    luxury of choices.

    Is it a Phone or an Identity Card?

    In the past decade or so, we have witnessed the evolution from physical identity cards and passbooks

    to virtual methods of establishing identity such as secret questions on telebanking, pin codes, barcodes,

    QR codes etc. As technology advances further, mobile devices will play a significant role in multi-factor

    authentication and authorization. Identity will be sensor driven in the age of robotics, cloud and

    predictive analytics. Face and voice recognition using biometric technology will enable mobile devices

    to replace the traditional modes of establishing identity.

  • Rethink the Mobile in Mobile Banking

    3

    Emerging technologies such as Near Field Communication (NFC), which is in vogue these days for

    making contactless payments, can also be used to enable devices to act as electronic identity

    documents. Since the technology supports encryption, it is more secure than Radio Frequency

    Identification (RFID) systems. Unique identity can be further extended to manage access in the form

    of common access devices, a concept that is already being applied for getting tickets or boarding passes

    at airports. Innovative applications of NFC technology include car-locking mechanisms, tagging of

    pets, parking meters etc. The emerging trends of Bring Your Own Device (BYOD) technology, virtual

    thin clients, and cloud-based network management can be applied to enable authentication even when

    a local network server does not manage the device.

    As wearables become more and more prevalent, users will be able to carry their identity with them at

    all times. As mobile technology becomes more and more affordable and accessible, a mobile device will

    gradually become an extension of ones self.

    From Consumer-Aware to Context-Aware

    The rapid innovations in mobile technology have far-reaching implications for service providers, who

    need to adapt their offerings to not only the evolving technology but also the corresponding shift in

    the consumers expectations. With the omnipresence of the internet and the proliferation of social

    networking channels, the user now has unlimited avenues of information at his disposal. Todays

    connected and informed customer is no longer a passive recipient satisfied with the functionality of a

    device, he is actively looking for new ways to extend the devices functionality.

    Armed with the awareness that user data is critical for a service provider, the user today is more open

    to sharing information, but with the expectation that the information will be used to deliver a

    customized and context-aware experience. Instances of these are the location-based offers in vogue

    today. However, a context-aware experience is not limited to location-based offers. The user now

    expects the mobile device to be an extension of his or her identity and personality. This presents an

    opportunity for service providers to offer a truly intuitive and context-aware experience, utilizing the

    data stored in the users device. For instance, when a customer walks into a restaurant, his mobile

    device could display the menu, allow him to place an order, calculate the tab based on the order, and

    finally settle the bill using the device. With GPS technology, it could even be used to locate

    acquaintances, as listed in the devices contact list or through social networks, who are present in the

    restaurant at that moment and allow the user to solicit recommendations from the menu or share the

    meal.

  • Rethink the Mobile in Mobile Banking

    4

    Implications for the Banking Ind