The Power of Mobile Banking The Power of Mobile Banking How to Profi t from the Revolution in Retail Financial Services SANKAR KRISHNAN Cover Design: Wiley Cover Image: © iStock.com/Pablo631 Copyright © 2014 by Sankar Krishnan. All rights reserved. Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 646-8600, or on the Web at www .copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at http://www.wiley .com/go/permissions. Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifi cally disclaim any implied warranties of merchantability or fi tness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profi t or any other commercial damages, including but not limited to special, incidental, consequential, or other damages. For general information on our other products and services or for technical support, please contact our Customer Care Department within the United States at (800) 762-2974, outside the United States at (317) 572-3993 or fax (317) 572-4002. Wiley publishes in a variety of print and electronic formats and by print-on- demand. Some material included with standard print versions of this book may not be included in e-books or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com. For more information about Wiley products, visit www.wiley.com. Library of Congress Cataloging-in-Publication Data: ISBN 978-1-118-91424-3 (Hardcover) ISBN 978-1-118-93203-2 (ePDF) ISBN 978-1-118-93204-9 (ePub) Printed in the United States of America 10 9 8 7 6 5 4 3 2 1 To my family and friends Contents Foreword xi Preface xv Acknowledgments xix CHAPTER 1 The Power and Potential of Mobile Banking 1 Why I Wrote This Book 1 Think Behavior, Not Technology 3 Why Mobile Banking, and Why Now? 8 Sanity Checks 10 Looking at the Opportunities and Challenges 13 Time to Rock the Boat 16 Focusing on the Customer Experience 19 New Models for Charity 20 Is That a Bank in Your Pocket, or Are You Just Happy to See Me? 23 Evolution or Revolution? 24 Why Innovation Is Foundational 26 Notes 29 CHAPTER 2 How Did We Get Here? 31 A Rich History, with Lots of Luggage 31 Is Mobile Banking a Real Trend? 34 It’s All about Location 34 vii Contents How Free Is Free? 37 M‐Payments 37 Creating the Future of Mobile Banking 40 Notes 41 CHAPTER 3 Welcome to Generation M 43 “See and Hear” Replacing “Touch and Smell” 43 Taking the Friction Out 46 Mobile Operators and Banking 47 Mobile Banks 49 Artifacts for a New Age of Banking 51 Note 52 CHAPTER 4 Less Cash, More Sales, Fewer Hassles 53 Soon, Everyone Will Accept Credit Cards 53 Following the Path to Acceptance 55 CHAPTER 5 Readiness Steps 59 Making It Real and Taking Your Show on the Road 59 Channel Discipline 62 Treating Different Channels Differently 63 Develop a Customer Strategy 65 Open Up Your App Store 67 Banks Aren’t Your Only Competitors 69 API‐ifying Your Bank 71 Remind Me, Why Are We Doing This? 73 Notes 76 CHAPTER 6 Prepaid Cards 77 A Step in the Right Direction 77 Financial Inclusion 83 viii