By Mark P. Dangelo
Mobile computing, and in particular mobile banking, has moved beyond the traditional laptop. The idea of mobile “wallet share” is no longer just about micro transactions tied to mobile money (e.g., Clear2Pay, PingPing, Square, Bump) , but a complete experience that reduces consumer churn, while increasing financial product cross-selling and up-selling. Reinforcing a need to uniquely engage a consumer, Adobe states that 1 in 7 FSI consumers change banks every year — yet “loyal” consumers purchase 40% more products and services.
Following market trends, the utilization of mobile technology by bankers and servicers seeking to reach consumers will continue to prove instrumental. These trends are not just for workouts and delinquencies, but for attracting those homeowners that possess outstanding credit. For agents and officers, advanced mobile apps will provide not only GPS paths, but criteria to navigate listings, find loan specialists, populate documents, and even perform virtual tours all securely and neatly fitting within ones palm.
Mobile advancements today draw parallels to the technology evolution of personal computing which began 27 years ago. This next decade will provide a unique opportunity to take advantage of changing behaviors and homeowner capabilities. Let’s look at just three of the trends that are already impacting the wide spectrum of mortgage capabilities in a growing mobile world:
· Private Clouds and Net Neutrality
· Smart Devices
· Privacy, Security, and Countermeasures
Private Clouds and Net Neutrality
It was just six years ago, the standards, domain names, and most of the network infrastructures were dominated by American firms. The debate over net neutrality was a frequent topic of media attention. However, as information quickly grew and offshore revenues expanded (along with international investors), the influence of a single nation to dictate a common vision began to wane.
Today with the rapid expansion of cloud computing and their co-dependent networks, there are now private clouds being developed each with specific capabilities and business intent. Examples of this includes, interconnected private-label trading networks, hardened FSI mobile computing for smart phones, and even architectures of mortgage clouds uniquely designed for consumers or investors.
As specialization is being deployed across hardware, software, and networks, we are also witnessing challenges at a country level, which threatens to fragment the idea of the Internet into very specific country solutions. The recent challenges and banning of BlackBerry communications is likely just the beginning of the potential objections forthcoming – they were a red herring for greater segregation.
Even countries that rely on the Internet for national commerce (e.g., India) risk having their “agency” demands cascading into a fragmentation of the very innovation that allowed them to flourish. Underneath the surface of the Google and Verizon net neutrality proposal recently introduced, we can clearly see the historic divisions rising up to create multiple nets – each with specialization, costs, and all distinguishing fixed from mobile. The FCC’s future directions will influence the U.S. – but it speaks for a smaller and smaller slice of the mobile world.
In general, the ability of one network or Internet to fit the growing individualization of service and product offerings has likely reached its zenith (existing only in a “super highway” form). Mobile will be segmented from fixed line and treated differently – it already is. Bespoke networks of networks over the next 4 to 6 years will develop into the new norm as mobile devices become more powerful and increasingly secure — each tailored to a consumer profile, channel, or behavioral type.
Smart Devices
Introduced early last decade, the term smart-phone has increasingly become a misnomer. For all practical purposes, it refers to a growing class of sophisticated mobile computers (SMC’s) connected via robust 3G and 4G public networks that just so happen to have their origins in voice.
For those vendors in the mortgage markets, these devices are forcing a rethinking of how and where to engage the consumer. Now with hundreds of thousands of apps written for smart devices available, the certification of conformance to operate on a secure, private cloud will force a reexamination of device level protections.
Examples of this will include, unique carve outs of memory protected by chipsets specifically dedicated to financial operations using ideas ported from “dark-op” efforts. Furthermore, 2011 promises the introduction of several of these solutions embedded within commercially available software and hardware – PC and laptop chipsets starting in 2012. Look for these solutions in FSI first.
With 20% of the U.S. population possessing smart devices, the ability to reach and retain these homeowners represents a chance to uniquely serve an educated and loyal consumer base. When applied to reaching consumers about their loans or accounts, the SMC will be one of the items least likely to be parted with giving a unique opportunity to engage those needing assistance – especially with built in GPS.
SMC applications will not be simply ported – but designed exclusively for these operating environments including, LOS’s, customer service, fraud solutions, validation (authentication, identification, and non-repudiation), and compliance.
Privacy, Security, and Countermeasures
The poster firm for privacy concerns has globally become Google – as information contained within their vast databases raises alarms among opponents and especially from country regulators.
There are those of Orwellian convictions who believe Google has assembled digital dossiers on every person’s on-line actions – across the entire world spanning 2.5 billion individuals. You can image the horror for homeowners or those seeking to repair credit, when it is learned they might have frequented sites about bankruptcy, defaulting on an upside-down loan, or even how to do a short-sale.
While many will rightly point out that secure mobile communications has to meet standards of performance and non-repudiation, the gaps of security (between a landline and wireless connection) are being closed. In fact, a great deal of security innovations are now being targeted singularly towards the mobile consumer and mobile banking / FSI in particular.
Firms such as Tigers Lair are introducing solutions that deal not only with counter measure capabilities (even when a device is powered off rendering the unit cleansed), but also security across the entire spectrum of mobile operations. Deploying a holistic approach, these next generation firms may be providing the mobile foundation not just for common retail banking, but for mobile BPO, compliance and assurance, and even as the primary system of record.
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Mobility has become part of the social mores for consumers. As the consumer base increasingly values their SMC’s (just try and take an iPhone away from their user), the highly customizable devices provide the identity for many under the age of 45. After a decade of experimentation, the building blocks are coming into place (e.g., see the latest announcements from Alcatel-Lucent).
The end result may be that to effectively select and manage viable homeowners in a post-crisis world, mobile holds one of the foundation stones needed for profitability and risk management. However, what is certain is that it won’t be as many are envisioning – a singular homogeneous device or network that provides everything.
Finally, with states looking to fill budget gaps, look for new taxes and surcharges on mobile and select applications. I wonder, what new regulations will be proposed and how will they all be managed? That is a battle for a future Congress.