Global banking is on the cusp of digital disruption. Threats are no longer coming from traditional sources, but from disrupters across industry verticals. For example, global telecom providers have applied for banking licenses. Major global retailers are also providing financial lending services.
This requires a fundamental shift in the way banks do business. While focus should still be on core products (retail, investment, and commercial), banks should start to provide more advisory and value-added services to make them an integral part of day-to-day customer life. Once organizations master the art of managing real-time, mobile-wallet-driven payment advisory services, they can focus on influencing the customer, adding value, and driving digital commerce.
The basics of commerce still remain the same, only the boundaries between the physical and digital world blur. Mobile is becoming primary channel for commerce, as the marketplace is no longer a town centers, but rather the Internet. Search is digital, and intelligent, metadata-driven, customer service is done over digital channels. Social media is becoming a place for intelligence gathering, product reviews and recommendations. Rewards, discounts, personalization, optimization and recommendations are done real-time, based on data analytics. And supply chain and inventory management are optimized, using digital platforms. Most important, the currency used to trade is no longer physical—it’s virtual or digital. This puts banks at the center of the commerce economy. So it becomes all the more important for banks to get their digital wallet strategy right as it will play a bigger role in driving digital commerce.
The progressive stages of adoption could be as follows:
Stage 1: The rise of mobile channels—establishing a wallet for sales
Proliferation of mobile devices, wearables, the IoT, and augmented and virtual reality devices coupled with a digital wallet is driving adoption of mobile commerce. Consumers are intelligently targeted real-time, based on location and context. Sellers and merchants also benefit due to adoption of mobile POS devices. Banks could build their own digital wallets. This will enable organizations to enforce transactions, using mobile devices.
Stage 2: Next-generation customer service, driven by mobile wallets
Customer service is a key post-sales activity that increases loyalty and advocacy. This also ensures high Net Promoter Scores, and larger wallet share. Banks need to align their services to provide higher customer satisfaction. For example, a quick video call to increase the credit limit on a digital wallet card could happen in real time, if a card is declined. Organizations can also offer real-time advice on promotions, rewards and loyalty for high-valued customers.
Stage 3: Customer and product personalization—delivering marketing and advisory services through mobile wallets
The rise of the real-time data analytics has changed the game for most e-commerce companies. A detailed analysis of product/service consumption, reviews and recommendations could help in configuring and optimizing prices, as well as recommend the right set of products for higher cross- or up-sell. With a larger adoption of digital wallets and effective partnership with retailers, banks can own the interaction and transaction data to drive advisory capability for value-added services.
Stage 4: Supply chain optimization with mobile wallets
Retailers are moving toward distributed inventories, and an order-management paradigm. By doing this, they are optimizing inventory and eliminating risk, using operating models in partnership with local merchants. This requires an integrated order management approach, which works well in this network model. Banks can tap into this retail/merchant network and open up larger lines of credit. Banks can also drive marketing notification models to drive more traffic to expert businesses through mobile wallets.
To conclude, if banks are to thrive in tomorrow’s digital world, they must be ready for mobile wallet adoption. This will ensure an active role in digital commerce and survival in digital economy.
Learn more about how Dell can help with Mobile Payments Adoption.