How does a technology company like Monitise help banks and financial institutions provide more value for their customers?
I spoke with Marc Winitz, SVP for marketing at Monitise, during a break at the Digital Banking Summit in Los Angeles earlier this month. And the answers he provided told me a great deal about where banks – and banking technology – are likely headed in the years to come.
Much of the current focus, he said, is on payments. The problem is that the payments business is pretty well-established. What banks and FIs should consider instead is how to add value at the “discovery” part of the transaction rather than at the “settlement” part of the transaction. In other words, being a significant factor at the beginning of the process rather than at the end.
The Peri mobile shopping app that Monitise developed and is being piloted by U.S. Bancorp is an excellent example of bringing banking and e-commerce closer together. Peri works by accessing the digital signatures embedded inside a growing amount of media – from television advertisements to print copy. With the Peri app, consumers can essentially recreate the online shopping experience while watching a TV commercial or reading an ad in a magazine.
When the app reads the digital signature of the item of interest, the item appears in the app. The actual purchase is quick and efficient since the consumer’s purchasing information (name, address, credit card number, etc.) is already on file at the bank.
The technology is likely to be white-labeled and made available to companies and brands. Importantly, however, it is an example of the kind of technology that helps put banks at the forefront of an area – ecommerce – that has more or less left traditional banking behind.
What’s interesting about this approach is how it serves both the retailer’s interest in minimizing the “discovery” period (i.e., less “shopping” and more “buying”), as well as the bank or financial institution’s interest in being a bigger part of the e-commerce experience.
And as far as Marc is concerned, banking apps like these are an important way to go. “They feature a front-screen engagement opportunity,” he explained. “They yield personal insights (into consumer behavior), and have a funding source/transaction/wallet component.”
Monitse Metrics
- Founded in 2003
- Provides services to more than 350 financial institutions and brands worldwide
- Has 28 million users and strategic partnerships
- Processes 3.4 billion mobile transactions a year valued at $71 billion
- Operates in the UK, the United States, India, Hong Kong, and Indonesia
- Trades on the London Stock Exchange (LSE: MONI)
- Led by co-CEOs Alastair Lukies (Monitise plc) and Elizabeth Buse (Monitise Group)
But there is a big question as to whether banks are situated in the right position to do what needs to be done to reinvigorate the industry. On the one hand, banks continue to earn a great deal of trust from their customers. This gives banks both the credibility and the “room to fail” that is critical when embarking upon new initiatives and ventures.
On the other hand, the challenge is that banks are no longer simply measured by their own performance vis-a-vis other banks. It’s not just the rise of non-bank actors, significant as that is. The move toward an omni-channel experience provides a whole new way for consumer experience to be judged (and for those judgements to be shared via social media). So now a consumer’s “banking experience” ends up being compared to a consumer’s “Amazon shopping experience” or a consumer’s “Apple Store shopping experience.” And if that doesn’t seem like a tall order for the average bank, then you are fortunate to be a customer of a far more, forward-looking bank than the rest of us.
According to Marc, banks need to first re-imagine how they do business, then see what technology is necessary in order to provide that business via a compelling user interface and experience. And the fact of the matter is that for many banks, choosing a technology partner is the most efficient way to make that happen.
Marc pointed out that mobile banking started with many banks, probably too many, thinking they could do it all by themselves. “Banks should do what they do best,” he said. “Don’t try and pick a gift card company. Let us do it.”
Monitise Milestones (2014)
- Acquired Markco Media for up to £55 million ($93.5 million)
- Launched mobile app design arm, Monitise Create, in North America
- Added former Visa executive Elizabeth Buse as co-CEO
- Announced mobile banking platform deployment by Desert Schools FCU
- Offered mobile alerting software as standalone product
- Acquired Pozitron in all-share deal worth $100 million
Who gets it? The largest banks, the top 20 Marc said, are making the right moves. “They’ve got all the money in the world to spend.” It’s the next tier of banks and FIs that have the greater challenge. This includes institutions like Desert Schools Federal Credit Union, the largest credit union in Arizona ($3 billion in assets; 320,000 members), that recently adopted Monitise’s Vantage 5.1 platform this spring.
The ability to conduct modular upgrades on the platform, Marc said, prevents a strain on budgets and IT resources. And this is a good thing not just for the bottom line of these mid-tier banks, but for the teamwork necessary to make mobile transitions work. “The whole team must be involved when it comes to something like mobile,” Marc said.