Mobile Wallet: The next wave of Digital Banking

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Mobile Wallet: The next wave of Digital Banking

Mobile Wallets - The-next-wave-of-Digital-Banking
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Unravel the underlying dynamics of the Mobile wallet market, with a bird’s eye view on the banking industry trends and implications on technology solution providers like Nucleus Software.

 

Gone are the days when we had to go out with physical wallets stuffed with cash. Thanks to the arrival of credit and debit cards, consumers have transcended themselves from physical cash to virtual currency.

 

“Mobile wallets are amongst the latest dots on the digital payments evolution curve.”

 

Mobile wallets enable users to pay for goods and services using a mobile app or service that contains their payment information. There are an increasing number of mobile wallets launched in the market from providers ranging from financial institutions and merchants to Customer Service Points and technology providers.

 

And now with Apple joining the bandwagon with the launch of Apple Pay, digital wallet revolution seems to have gotten the much needed shot in the arm. No hassle of pulling out the right card from your wallet, no swiping and no waiting. All it takes is a single touch. Even though Near Field Communication (NFC) payments are already in use in some markets, Apple has leveraged the technology by incorporating biometric technology which enables you to place your device over a NFC pay-point and your thumb on the reader, and voila – automatic authentication and payment confirmation gets signalled by a subtle vibration of the device. Along with the convenience and amusement it also comes with more privacy and security.  iOS apps of Starbucks and Groupon have already incorporated Apple Pay, with others expected to follow suit sooner rather than later.

 

Mobile wallet evolution is just getting started. In future, mobile wallets would include loyalty and reward features, which are good approaches to drive adoption because they give good value to consumers. And with bitcoins lurking around, the possibility of ‘buying anything with anything’ would pose new problems for regulators and governments around the world.

 

So what does this mean for the banks and for the technology providers?

 

Just as physical wallets come with a wide range of sizes and colours – from oversized purses to money clips – mobile wallets too will have to look beyond the one-size-fits-all proposition. Bank of America, Citi, American Express have already started to join hands with Apple to take advantage of this new trend. The incentives for both the parties are manifold. Firstly, this will decrease customer data breaches and secondly, Apple Pay points towards the future of mobile payments which will be fast, secure and convenient.

 

For Technology providers such as Nucleus Software, disruptive innovations like mobile wallet brings both new challenges and new opportunities. As the basic mobile wallet functions mature, the demand will shift to obtaining more insight on customers by understanding their profiles and behaviours. This is where Technology providers can add value, enabling not only payments but also deep customer insight by using the payment information. Therefore, more sophisticated data analytics and targeting will become key differentiators for solution providers, enabling banks gain more value from the mobile channels and apply that insight to deliver targeted customer experience across multiple channels.

 

What else do you think we can and should do to leverage this inflection point in the industry?

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About the Author

Arup Das, Vice President and Lending Product Head (P&L Management)

Mr. Arup Das is the Vice President and Lending Product Head (P&L Management) at Nucleus Software where he is responsible for taking the flagship product to the next level of global leadership. Before joining Nucleus, he held a variety of roles in strategy and product management with leading companies including CISCO, IPValue and Mphasis.

Comments

David Turner- July 14, 2015

Nice post, Arup. As you mention, the richness of data that this will deliver is fantastic. Up to now single retailers have been working with 'big data' to predict buying preferences and 'nudge' people towards buying related items based on their previous behaviour. Cross-retailer loyalty cards like Nectar in the UK have taken this a step further. Now the mobile wallet will give companies a total view of a user's spending habits across all spend, analysable by time of day, week, month and year, location, etc. The killer is that that you can then use the same device - the mobile - to deliver offers, related to times or locations that are most likely to prompt the desired outcomes. A marketing professional's dream!

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About Nucleus

At Nucleus Software we are committed to providing efficient, modern yet proven software solutions for the global Banking and Financial Service industry. We have been pioneers in developing Retail Banking Software, Corporate Banking Solutions, Transaction Banking, Cash Management and Internet Banking Software since 1986. Our success spreads across more than 50 countries, and we serve our customers globally through our direct and partner operations across US, Europe, Asia-Pacific, Africa and the Middle East. We are known for our world-class expertise and innovation in lending and transaction banking technology. Our two flagship products, built on the latest technology are: FinnOne™ and FinnAxia™.