I’ve worked in the financial industry for the past 4 years, but for the past 2 years I’ve become more interested in the technology side of the business. I’ve had the opportunity to see both sides of the business – working with a small local institution and now with a Top 10 U.S. institution. Until recently, most financial institutions weren’t really breaking-edge when it came to technology. The security and complexity required of such platforms caused a lot of financial institutions to rely on platforms that the general public would consider “dinosaur.” While there have been some changes, the behind-the-scenes system is ancient – but it works, so why change it.
That mindset of avoiding technology has changed, however, as more financial institutions are aggressively increasing their focus on technology. Yes, there is a push to start investing in social media (see previous post on this issue), but what I find fascinating – and what’s not getting much mainstream attention – is a focus on mobile technology.
I’m not talking about accessing your account on your mobile phone – although that feature still has room to improve. Most large banks offer that feature. With the smart-phone craze right now, creating technologies that make it easier and more efficient for consumers to make payments, process payments and manage their finances are what will shape the future of the financial industry.
A few concepts that I believe have potential – keep in mind, I’m not an IT or technology expert.
Payment processing – The days of being able to make and accept payments via your mobile device is definitely coming. There’s two different routes that technology can work here – 1) an alternative for credit card acceptors and 2) linking your mobile device to your account to make payments, send and receive money, etc.
The one hurdle here is security. Who’s responsible for fraud issues? Does the liability fall in the mobile carrier’s hands or with the financial institute? Financial institutions have seen an increase in ATM fraud, text messaging fraud and Relay fraud, to go along with the traditional fraud that’s always existed.
Two examples of interesting concepts:
- Zoompass – courtesy of Danny Brown
- Bling Nation
Easier purchasing access – We’ve seen the transition to cash to checks to plastic. Now we’re aiming to eliminate all three and introduce near field communications. One of the neatest technologies is a swipe-n-go method currently being tested. With this method, you can apply a credit card-like sticker to your mobile device and simply wave your device across a sensor. The sticker (for lack of a better word) is attached to either your credit card or bank account and automatically deducts the amount of your purchase. Again, the biggest issue is security.
As technology continues to advance, the financial institution has the potential to make our lives a little bit easier. While social networking is the “hot thing” right now, don’t bet against mobile technology becoming a bigger role in your finances.
