Posted: 27 Feb. 2018 10 min. read

Where it counts

How mobile phones are contributing to disrupting the financial services sector

The 2017 Mobile Consumer Survey contains a wealth of insights for mobile phone operators, providers and developers. It also provides an in-depth look at how Australian consumers are using their mobile phones. In this series of blogs, we’ll explore the implications and opportunities caused by changing mobile phone use across a range of sectors in Australia.

Our annual Mobile Consumer Survey explores how people are using their mobile phones to shop, purchase and pay, as well as looking at how issues like biometrics, identification, privacy and machine learning in our mobiles are evolving. Trends and behaviours which are very much of interest to the Financial Services sector. This year, the survey tells us that mobile payment technologies are becoming increasingly available, with in-app payment and touchless technology overcoming traditional barriers to purchase on smartphones. The use of fingerprint authentication on smartphones has surged, with a 35 percent rise from 2016.

As screen size and technology improves, and more retailers and financial institutions modify and roll out mobile friendly sites, the smartphone is increasingly becoming the device of choice for browsing and buying. Browsing a shopping website and researching a product/service are the most popular shopping related activities on a mobile. Easier payment has enabled significant growth (25 percent) in mobile purchasing.

18-24 year olds remain the primary adopters of biometric authorisation technologies at 50 percent, with Apple retaining their lead over their competitors in the Australian market. This group also share the most data with companies online, yet are also the most trusting that these companies don’t use this personal information or share it with third parties.

The data on how people are interacting with businesses on their mobiles tells the wider story about what is really changing – customer behaviour and expectations.

Gaining a true understanding of customer motivations and pain points, and how to solve them, is what is driving many of the most successful fintech challengers.  In this year’s report from Deloitte and the World Economic Forum Beyond Fintech: A pragmatic assessment of disruptive potential in financial services, we take a look at how fintechs are really impacting the financial services sector, how the incumbents are responding, and what the future might look like.

The report lists eight forces that have the potential to shift the competitive landscape of the financial ecosystem. Two of these of interest to mobile phone operators and developers are:

  • Experience Ownership: Power will transfer to the owner of the customer interface; pure manufacturers must therefore become hyper‐scaled or hyper‐focused
  • Platforms Rising: Platforms that offer the ability to engage with different financial institutions from a single channel will become the dominant model for the delivery of financial services

The central finding of our research is, while we have seen fintechs drive substantial shifts, particularly in consumer facing businesses, in the financial services sector, we haven’t seen them totally disrupt it. Instead, the incumbents remain dominant, but have responded to the challenges posed by fintechs by adapting, acquiring, collaborating or embracing.

Where fintechs have especially succeeded, is in reshaping customer expectations, setting new and higher bars for user experience. Through innovations like rapid loan adjudication, they have shown that the customer experience bar set by large technology firms, such as Apple and Google, can be met in financial services. And of course, the continuing popularity of the mobile phone as the device through which customers prefer to engage, means they will continue to have the edge in how to deliver excellent user experience.

Innovation or disruption in the financial services sector will occur where customer friction points and the potential for large profit pools intersect. Observing changing consumer behaviour and interactions through looking at how smartphone use evolves is a great way for operators, fintechs and incumbents in the sector to gain insight into at least half of that equation – what the customer wants.

Further information, data and insights on Australia’s relationship with the smartphone is available from the Mobile Consumer Survey. And for a view of what Tech, Media and Telco trends to expect in the year ahead check out our TMT Predictions 2018

More about the author

Arthur Calipo

Arthur Calipo

Partner, Financial Services

Arthur is the National Industry leader of our financial services practice. He has 25 years of experience working in the Banking, Insurance and Wealth Management industries leading Strategy, Operations and Transformation efforts. His consulting career includes leading projects across Australia and Southeast Asia, Latin America, United States, and Europe. In addition to his Consulting experience, Arthur brings five years of experience in the Industry working in Banking and Insurance with global organisations where he had senior roles in Operations and Products. He also served on the Board of Directors of a Life Insurance company in Portugal. He has extensive experience in retail, business and corporate banking, general and life insurance, and wealth management. His areas of focus include strategy development and implementation, operational effectiveness & improvement, customer experience enhancement and target operating model definition.