Financial services providers have invested heavily in new channels such as interactive digital TV and mobile phones, but these services have yet to catch on with the consumer. This doesn’t mean it’s time to pack up and go home. The key is in matching the service to the technology. For example, mPayments look far more promising than iTV banking.
European take-up of mobile and TV banking has fallen far short of expectations.
Datamonitor’s new report, New channels in European Financial Services 2002 looks at the role of new technologies such as mobile phones and interactive digital television in financial services.
A number of factors have restricted the success of new channels in financial services. While they are highly time-efficient, they currently offer poor transactional and after-sales care, and are harder to use than a branch, mail or PC-Internet.
Just 13% of UK digital TV owners plan to use their digital TV for online banking or broking during the next 12 months. In Germany and France, less than 6% plan to do so. Consumers associate TV with relaxation, leisure and entertainment, not financial affairs.
Similarly, mobile phones are seen as a communications device rather than as a transactional device. In Spain and Italy, where more than 20% of mobile users plan to use their phones for email, less than 7% plan to so for banking or broking.
But this only underlines the fact that new channels must be positioned correctly in the financial services distribution and marketing mix. It’s no good trying to get consumers to use devices for functions that they are obviously not suited for. Instead, financial services providers must ensure that using the new channels is more straightforward.
Mobile payments could be a good opportunity for financial services providers to exploit. Some mPayment services in Europe, such as Paybox, reposition financial services suppliers in the value chain. In contrast, Mobipay is an example of financial services providers and mobile operators coming together to drive forward the market, creating an open payment system.
The recent launch of i-mode could be particularly good for financial services providers. The larger screens of i-mode-enabled handsets provide a more user-friendly interface than traditional handsets, and hence a more viable interactive medium. If i-mode takes off, banks look well placed to benefit.
Related research: Datamonitor, 2002: New channels in European Financial Services 2002