Thursday, October 2, 2008

The future of mobile banking

The ZMET model for market research is a qualitative research technique which uses images and metaphors to reveal how consumers think and feel about brands, products or industries. Sounds pretty hokey, I know, but recently, my good friend and media expert Andreas Ruggie did one with me as the subject and I actually found it to be quite enlightening. The topic was the future of mobile banking and transactions.

The setup is 8 images which I posted throughout. Andreas asked me to pre-select these images before the interview so that we could discuss them. This turned out to be a way m,ore interesting exercise than I thought it could be. Thanks to Andreas for providing the transcript and doing a great job facilitating.

Andreas – What were your primary motivations for choosing the pictures that you did?
Ted – So, I just went through a few websites and used Google images to try to pick images that lined up with my perception of what mobile banking is and where its used, and where it will be. So I gather that it just hasn’t, I think we have more options for access in the US, right, we have ATM’s on every corner, you know bank branch in every neighborhood, and we all have web connections, and PC’s, so it’s kind of different, so I have all these images of how mobile phones are used outside the US, like Asia where I’ve spent some time, and the developing world, so a lot of the images are focused around how it’s used there. But I think in the US, it has a lot of potential, but the interface isn’t really convenient enough yet, maybe not secure enough yet, so in other countries where you have less of an option as to how you do your banking, it’s more adopted, you see it used there more.
Andreas – OK, well let’s start with this one (1) since you mentioned international, how does this image relate to mobile banking, and think you already sort of explained that in your personal life.


Ted – Yeah I’m doing a bunch of projects in Africa that are mobile phone centric, so one of them is developing a scalable model for cervical cancer screening in Zambia using mobile phones, and sort of through the process of learning, about what’s going on there, that mobile phones are getting to the point where they’re pretty ubiquitous in Africa and they’re serving as sort of the primary mechanism for everything, including a lot of the payments, the payment system is not just mobile banking, but mobile bill pay, and like rechargeable digital power companies where you buy an add-on to your phone for micro payments, so that’s where this image comes from.
Andreas – OK, so let’s delve into some of the touchy feely questions. How does this image make you feel?
Ted – Well I picked this image I think because it’s very positive one, everyone’s around the phone, you can tell it’s a very rural village, people live in straw huts, but they have a mobile phone. I think this is a great picture, because it feels like the phone is the connection to the outside world, bringing a lot of joy to these people, and I think that’s what mobile phones have the power to do in places like this. They can change people’s lives, bring currency liquidity and microfinance and a lot of power to these people, but also connection to the outside world, information, the ability for people to connect to the outside, I imagine they’re very isolated location.
Andreas – So putting yourself into this picture, if you were a part of this picture, based on what you just told me, what role would you play?
Ted – If I were to play a role it would be to design some type of technology or process to improve the lives of these people.
Andreas – Is there anything hidden in this image, like something below the surface that is not apparent upon first site but that was a subconscious motivator for you?
Ted – I just grabbed the image, I didn’t spend a ton of time looking for an image like this, but when I sit here and look at with you, it’s maybe a lot of subconscious, of what I think mobile phones have the power to do.
Andreas – OK, how does this image (2) relate to mobile banking?


Ted – I was looking for pictures like the one before, you know the rural, and I saw this one and I kept it in the stack because I think of sometimes the annoyance of people always being on their phones, and I’m the worst, I like sit in class and like browse my phone. Whenever the conversation is boring me I’ll check my email real quick on my phone, so I just thought this is an absurd example.
Andreas – So if you were in this picture you’d be the vibrating cow?
Ted – I do always leave my phone on vibrate.
Andreas – How does that make you feel though in terms of your own use, since you say that you’re annoying. Does that give you any hesitation in terms of spending even more time in your life in the future using it?
Ted – Well in some ways vibrate is different from off, if I didn’t want to know, if I didn’t want the information, I’ve had the phone off, but my phone hasn’t been off since I got a cell phone in 1997, I’m part of the connected economy these days. I’d say that if I could get mobile banking alerts that provided me with information I’d want to know, I’d leave my phone on vibrate. I’d like to have my push email set to notify me, because I’d want to know what’s going on, I’d want that sense of connectedness. In regards to mobile banking, finance wise you want to have that same level of visibility to what’s going on.
Andreas – What about this, are you this guy (image 3)?



Ted – I just picked this one because I think of the most powerful mobile banking or at least most sophisticated mobile banking economy as Japan, where they use it as like they’re T-pass, they make mobile micro payments, pay for snacks at the 7-11, that type of thing.
Andreas – So is this like the future for you?
Ted – Yeah, in some places I think it’s the present. You see the woman listening to music, this is a banker, he’s reading financial news and doing mobile banking, and then I think…
Andreas – The bank is almost apprehensive or something…
Ted – Yeah, the distressed bank, I don’t know if he’s been taken out of the picture, or no one wants to visit him. I didn’t actually notice that until just now.
Andreas – Yeah, me neither. What do you think that means?
Ted - So, Sovereign Bank, my business accounts, I have a consulting company on the side, so I only get paid once a month or every couple of months, but I don’t move money around all that often, but whenever I do, I just walk two blocks and stop at the bank, but if some of these transactions like mobile or even web based were better I’d probably never stop in the bank. The store is the thing I’d like to see, when you can pay with a cell phone in a store, that’s when you really cross over with the whole thing.
Andreas – OK, this one (4)


Ted – Just another example of a place where mobile banking could have a big effect. Like I see a place here that doesn’t look to me like you’d have a cable line or wifi and you probably wouldn’t be very close to a branch. It looks like Mexico to me.
Andreas – So the other one was a rural setting and it was like discovery, people were happy, whereas here it looks a little more desolate, is this almost like the frontier that hasn’t been hit yet?
Ted – Yeah, it's remote, and you have people who are clearly, they have eight trucks, it looks to me like a thriving business, I have no idea what they do, but the remote folks still need services, and I thought this was an example of a location where mobile banking would make a big impact.
Andreas – So again, insinuating yourself in this photo, would you be the one to provide service to these people, or do you see this as a future where you could live in a place like this and still feel connected?
Ted – A little of both, I think as a lot of the social and developing world entrepreneurs need a system to facilitate making a payment, so you can imagine these guys do business with a budget with even smaller fries, how are they going to facilitate payments, are they going to do it by cash, or some simple banking thing where they touch up a code and that’s it.
Andreas – So I didn’t even know what this one is (5)


Ted – So in Hong Kong they have this thing called Octopus, and its like a Charlie Card, except imagine if you could use your Charlie Card anywhere to buy anything of convenience basically, like a tap card you could pay for 7-11, you could pay for pass, yo9u could get into the horse track. Basically you have an account that comes with the card with money on it and it debits the account. If you lose it, somebody else can use it.
Andreas – Is this the card?
Ted – This is the ubiquitous reader, it’s RFID. So I wanted to bring the RFID element into it a little bit cause I think that’s a big mechanism that mobile banking could go in that direction. It’s a mobile phone, but if it has an RFID chip in it with certain layers of security that you could facilitate a lot of payments. I would love that. There would be nothing greater, and you wouldn’t have the problem like with the Octopus card in Hong Kong is that if you lose it somebody else could use it. But your mobile phone is intrinsically linked to you, if you have your own payment code or pin code that slows everything down, you could tap and pay with your phone anywhere, that would be amazing, you could do anything you want, you just need a phone.
Andreas – So you would welcome an Octopus-like culture?
Ted – I would love it. With the Octopus card, if you have it in your bag, you don’t even have to take it out of your bag, you can just tap your purse, it’s just so convenient, and you see on the T people struggling with their whatever, you’re waiting in line at the convenience store, if you go to certain sporting events in Hong Kong, there’s no people selling tickets or anything, you just go, take your Octopus card you tap and go through the turnstile.
Andreas – All virtual transactions.
Ted – It just takes so many layers of costs out, its so convenient.
Andreas – This is more a graph than an image, but (6)… Who’s data is this?

Ted – It's Tower Group. But I just thought it was striking, I ran into it as I was going through some of the images. It seems so little, 1.1 million mobile banking users in 2007, to think there will be 41 million users in 4 years, is quite remarkable. I don’t know how exactly that will happen but…
Andreas – Well, things happen fast in high tech. Alright, this one’s missing the face of the girl, she was smiling (7)

Ted – Yeah this one’s person to person and I just really like this idea, there’s always that guy who owes you $20 or something, and he’s never got it, and I just imagine, just give me 20 credits on the phone, or the same thing with Octopus, just tap, pay, sort of a fluidity of liquidity that the phone generates. They always talk about how potentially you’re going to replace cash with credit cards, but I can’t stick a credit card in you and run it and get 20 bucks from you, but that might be possible with phones.
Andreas – Well that’s interesting because as opposed to the Octopus one where you were explaining that that was just a replacement mechanism for transactions, this one is actually insinuating that, as you said, a transaction that you wouldn’t necessarily have been able to go through…
Ted – Yeah I think that’s right, I think there’s the case where sometimes I owe you 20 bucks, that different, but say we play a round of golf or something, and you just want to give me 100 bucks, you could do something like that…
Andreas – And the other difference here is that this is an interpersonal transaction, these people are actually gaining a relationship by a virtual transaction.
Ted – Yeah, it kind of has a power to mediate relationships in a different kind of way.
Andreas – This image is linking an American Express card to a cell phone. (8)



Ted – I’m a loyal AMEX user ecause the service is exceptional, and I like having as close to consolidated one stop reporting as possible. I would prefer to see my mobile phone transactions tied closely back to, I’d like the reporting to be integrated with something I look at already. I would prefer not to have another thing to look at all the time. I don’t want a mobile account and add that on to the things I have to pay and check on, I would prefer it to be linked to my bank account or my credit card, but I would especially prefer it to be linked to American Express because they give me a lot of piece of mind with regards to security and if there’s a transaction that goes wrong I know that they’ll help me out with it, make sure that whatever security problem that happened is fixed.
Andreas – But going back to our segue into this image, obviously this is an ad for American Express, but if we were pessimists about this, and we saw your credit card information linked to your phone, and you think about what if you lost your phone or something, right, there’s this new horizon of …
Ted – Yeah, I trust that there would be, you’d only be able to tap and go for transactions under $10, and to transfer money peer to peer you’d have to have some combination of codes, and security. This stuff will get adopted when it gets figured out, there’s certainly models to do it, I think that the risk management people are pretty good.
Andreas – So there’s clearly a threat out there, but you feel comfortable about the players already involved in pushing it through…
Ted – Yeah, well I mean how much worse is it going to be the outright identity theft that already occurs? Every time you use your credit card at a restaurant there’s a chance it’ll be stolen, and you don’t have a pin number for a credit card in the US, you sign, and anyone could sign my signature, mean it’s just a T squiggle and a C squiggle. So yeah, I think it’s a super interesting thing as to how it’s going to be done, I mean it could be less risky than a credit card, right? I mean one could imagine, a phone is a much more powerful device in terms of what you can do security wise compared to a credit card.
Andreas – Now we’re going to move on to your expectations about mobile banking, I know you’re not a big user, and this might have something to do with your concerns. OK, have you ever heard of mobile banking being offered by a bank or credit union, and how did you or how would you learn about it?
Ted – I think Bank of America offers it, I don’t use it, the thought of entering all the numbers to log in and password doesn’t seem all that convenient for me to do on a cell phone.
Andreas – Interesting. So that would be one of your barriers to entry, so to speak?
Ted – Yeah, I would need it to be. That’s a question for me as to whether I would ever adopt mobile banking. I would use it for the transactional type stuff more than I would ever use it for information about my accounts. I rarely have a situation where I would need to know exactly how much money I had in an account at that moment when I’m walking down the street and just need to know, that doesn’t really happen. I generally have a sense of my finances, I sit down at the computer, I feel organized, so I don’t really see myself adopting mobile banking in that matter. I don’t know how they could make mobile user interfaces all that much easier because I don’t think it’s necessarily the design of a mobile web banking interface, I just don’t think that… you’re either going to enter a wrong number, its just not that easy to do on a mobile phone, it’s not a super comfortable thing.
Andreas – OK, those are kind of the concerns. So going back to a more optimistic point of view, after becoming aware of mobile banking, those concerns aside, if you wanted to, what avenues of research would you use, what would motivate you to learn more?
Ted – I’m definitely an early adopter of most technologies, I mean I actively sought out the little key chain micropayment card when I heard about it. I got the Amex one, PayPal. I actively sought getting those because I thought they would make my life more convenient. They did, even if the only place I could pay was CVS. So I would probably find out about it from one of the blogs I read or just seeing someone else us it, and if it would make my life more convenient and make me look just a little bit cool. I’d give it a shot, for sure.
Andreas – OK, so if you tried it once, what features would make you try it again?
Ted – With all this stuff, it’s got to be convenient, easy to use, that’s the most important thing. It relates to, what am I doing now, and will it actually save me time, I mean time is money, right? Time is valuable to me, I don’t have a lot of it, I’d rather be doing something else than waiting in line, signing receipts, getting a T pass, when I could just be going through.
Andreas – So if it was the right experience for you, if it was convenient for the population in general, do you see mobile banking as a supplement to internet banking or as a replacement? Could this be the future?
Ted – I see it more as replacement for other things, to maybe the ridiculous key chain full of loyalty cards, or as a partial replacement for credit cards. I don’t see it as replacement for web banking services, but I could be wrong on that. I could think of a scenario on which I get all the email to my phone and my computer, if I got an email, I click on the link, it said I owe money to Amex, I opened, it, and it’s already linked to my bank account and I could just pay that way, I could see that. I don’t look at my individual banking transactions that much anyhow.
Andreas – OK, summary. Describe in detail the ideal mobile experience, taking into account all the things we’ve discussed. What kind of messaging would impact you the most? What kind of advertising campaign would capture your attention? What kind of service would satisfy you as a consumer? So this is your big sendoff.
Ted – I’d want that integrated payment ability across as many different locations as possible, with strong security linked to my personal identity and finances. I’d want pretty simple reporting and alerts to tell me if my account balance is low. I’d want it linked to, if not Amex, an organization that gives me the same level of piece of mind that if I use this for transactions, it would be secure.
Andreas – In terms of messaging, we saw your images, but what would be your ideal ad campaign that would sell you on an emotional level?
Ted – I’m already sold on it just because having seen what Octopus is like in Hong Kong, the massive level of convenience, all you have to do is show me someone tapping their cell phone. But probably the security would be an important part of the messaging. I’d need the piece of mind that everything is sort of kosher, convenience and security are the two things, they go hand in hand, because it’s a pain in the ass when someone steals your identity. A couple of security incidents and the value of saving ten seconds goes away pretty quickly.
Andreas – Any last thoughts you’d like to add or say? We’ve seen what Tower has to say about the near future, so should folks be going for it in this space?
Ted – Yeah, but I think they should go big. It’s a lot bigger opportunity to be something like Octopus in the US market than it is to provide the existing banking customer base with mobile features when they have so many other ways to bank.
Andreas – So go big or go home?
Ted – Exactly.

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