When St George’s head of eChannels Travis Tyler told the bank’s technology chief that he wanted to let people apply for credit cards through their mobile phone, the first reaction was disbelief.
“I told Travis ‘no one will want to do that’,” says St George chief information officer Dhiren Kulkarni.
“But we pushed ahead and then the data comes through and sure enough, people are sitting on the bus, opening new credit accounts through their phone.”
There doesn’t seem to be any limits to what people will do with their phones and banks are spending big bucks on developing mobile applications, which are creeping into every aspect of modern life.For weekend paper: No honorifics, present tense where appropriate, change references to today, yesterday and tomorrow to actual day
Tired of collecting bank account details from friends and family when you need to transfer cash? Well there’s now an alternative. You can send them a text giving them details of how to go online and get the money you have authorised to be taken out of your account.
If they don’t claim, the money simply makes its way back to your account. And you can check what’s happened through your mobile phone.
Or imagine one Saturday morning you are on the real estate hunt and suddenly you find yourself looking at a property that you know in your bones should be your new home. It’s for sale and other possible buyers are queuing behind you. You want to make an offer but you’re not sure how much the bank will lend you against that particular property.
If you’re a Commonwealth Bank customer, soon you’ll be able to get a loan approval instantly via your mobile phone. The bank will also offer you home and contents insurance on the spot. Life insurance, as well, if that’s an issue. You may well spurn the insurance but with an approved loan assured, you can go ahead and make that bid.
Mobile applications like these are changing the way we buy things and move our money around and it is happening very, very fast with billions of dollars moved by mobile applications each month. Currently, 46 per cent of Netbank log-ins to the Commonwealth Bank’s internet banking platform come through either tablets or mobiles.
That’s up from 26 per cent just 12 months ago. More than $1 billion has been channelled through the bank’s Kaching application launched in October.
The banks, which know they face competition in mobile finance from global giants like Google and other companies like PayPal, have moved into top gear. Applications that used to take three years to develop now take six months or less and everything has to be real time. It could take days for transactions to become visible through internet banking. Now – depending on your bank – your credit or debit purchases can be viewed through the app on your mobile phone before you’ve had time to put the package in your car.
Once upon a time banking executives didn’t concern themselves too much with what we did on the couch during television ad breaks, or what went through an impulse shopper’s mind as he or she was tempted by a storefront display.
That was before banking went mobile.
At a recent briefing one of the slides NAB flashed up on the screen mapped mobile banking log-ins against the ad breaks in one of the year’s biggest rating TV shows, the finale of The Block.
It showed log-ins zooming up like a crazy heart monitor every time the ads came on.
In the past 12 months, the advent of the tablet has added another dimension, says Tyler.
“Internet banking has traditionally peaked in the morning and then tapers off, in line with the time people were at work,” he says. “Mobile banking peaks in the commuting hours with people on their way to or from work. The iPad brought in another peak, in the evening hours, up till about 9 pm.
“Banking has become a secondary task. I used to go to the bank to do banking, now I do it while I am doing other things.”
This is not without its pitfalls. St George offered to send the Weekend Financial Review $15 by text message to demonstrate how that app works and accidentally sent us $51 instead.
But the possibility of such slip-ups is clearly not deterring take-up. St George reports internet banking customers who use a desktop computer log on 10 times a month. Mobile customers check in twice as often.
And what are they doing? Well, it’s the high-tech equivalent of reading your passbook – checking account balances is the most frequently used mobile banking facility by a long shot.
Then come transfers between accounts and payments to third parties.
To date, ease of use has been the big selling point. If you are doing your banking while watching the TV, you don’t want anything too complicated, Tyler says.
“It has to be incredibly simple,” he says. And if a bank does something its mobile customers don’t like they won’t keep quiet about it. When we redesigned the mobile platform last year we left out debit card authorisations; not the amount involved but the descriptions.
“Our customers told us in no uncertain terms they wanted that feature back.”
In this space, first is important and so is popularity, which is why the Commonwealth Bank’s financial report includes statistics on mobile banking and noted Kaching is No. 1 on the iTunes finance hit parade.
The bank is pouring money into mobile, says CBA chief information officer Michael Harte. “We used to spend $800 million a year on our technology infrastructure,” Harte says. “We have halved that and moved most of the capital to the development of online content. So now 75 per cent of what we spend is on existing and new online content.”
The bank is simply following its customers who have retreated from branches and are moving away from automatic teller machines in favour of online banking and transactions at point of sale.
This is the focal point of much of the new developments. Some of the banks, including CBA, offer consumers the chance to wave their phones over specialised readers. These contactless payments are still small beer – not many merchants have the required terminals and even the new iPhone 5 doesn’t have the technology built in – but it is expected to become more widespread.
Harte says business is well and truly part of the mobile revolution.
Next year the bank will launch a retail device that will allow shoppers to make contactless payments and also enable third-party developers to create applications for business.
Other providers are also stepping in. Processing credit card payments has long been an expensive headache for many small businesses.
Earlier this year, PayPal launched a small, plug-in device that enables businesses to collect credit card payments through their mobile phone.
Kelly West says this has solved a headache for her business, Balls & Giggles, which runs a social netball competition for mothers in Sydney’s eastern suburbs.
“Being able to take my smartphone down and have the players swipe the cards through the phone is just great,” West says.
“The novelty factor is fun but it has also made life easier for me. I really am the smallest fry. We take in less than $10,000 a quarter so no bank was going to give me the gear I would need. This is a great solution. I can take it around, use it anywhere.”
She adds the fees are reasonable; not as low as some merchants but the time savings make it more than worthwhile.
“I still have to do quite a lot of manual reconciliation, so there is a bit more keying in than I would like, but I am sure that will come in future releases,” she says.
West jokes that she is “quite frightened by the capability of my phone”.
“I plug this little device in, swipe the cards and I have money; it’s really amazing,” she says.
There will be more such moments for many of us in the months and years to come.
