ANZ first Australian bank to roll out Voice ID for mobile banking

ANZ says it will today be the first Australian bank to roll out Voice ID technology on mobile banking enabling customers to complete higher value transactions conveniently and securely.

With Voice ID, ANZ customers can now make ‘Pay Anyone’ payments of more than $1000 on their mobile without needing to log into internet banking, or remember additional passwords or PINs, or visit a branch. They can also use Voice ID to make BPAY payments of more than $10,000 on their mobile.

Commenting on the announcement, Managing Director Customer Experience and Digital Channels, Peter Dalton said: “This is a significant security update that will make it easier for our customers to complete high value transactions on their smartphones.

“Customers increasingly want the convenience of banking on their digital devices and this solution delivers that with the added level of voice biometric security.

“This will be particularly good news for our small business customers who regularly need to make payments of more than $1000 on the go and will only need their voice to authorise those transactions.”

The rollout comes after ANZ completed a successful pilot program with the new technology in recent months and will be available for customers using the Grow by ANZ app from today. It will then be rolled out to other digital channels across the bank.

ANZ has developed Voice ID with world-leading voice biometrics company Nuance to bring the new technology to Australian customers.

Nuance managing director Aust & NZ, Enterprise Division Robert Schwarz said: “ANZ is taking a forward-thinking yet secure approach to identity verification with Voice ID, making it fast, easy and secure for customers who are on-the-go to perform high value transactions.

“Through the ANZ mobile banking app, Voice ID uses proven voice biometric technology from Nuance that is more secure and more convenient than legacy authentication methods.”

Westpac Rated Best in Mobile Banking Functionality

From IT Wire.

The Commonwealth narrowly pipped Westpac as Australia’s top bank due to the usability of its mobile and digital services, but Westpac was deemed to be the bank with the highest score in mobile banking functionality, according to a newly published study. However, apart from CommBank and Westpac, the other Australian banks still have a way to go when it comes to money movement, service features, cross-channel guidance, and marketing and sales.

The study of Australia’s large retail banks by global research firm Forrester found that digital banking teams have improved transactional features like mobile bill payment and point-of-sale payments – but few banks help customers manage their money better, make relevant product offers, or provide much help through mobile banking.

Forrester surveyed five large retail banks in Australia. As well as the Commonwealth and Westpac, it surveyed ANZ Bank, Macquarie Bank and National Australia Bank (NAB).

But, in naming CommBank the best of the big banks, Forrester said it emerged on top with “impressive usability”.

“CommBank ranks as one of the top banks globally in usability in our benchmark. The bank stood out with impressive usability, specifically in making search and navigation clearly visible and easy to understand at all stages of the key tasks that the persona is looking to achieve,” said Forrester’s report author Zhi Ying Ng.

“The bank also offers strong mobile functionality, provides the widest range of touchpoints for customers, and makes login convenient.”

Forrester also found that CommBank earned the highest score in money movement.

“It not only lets customers make basic internal and external money transfers, but also supports more sophisticated features, such as letting customers use their phone’s camera to pay someone or pay bills,” Forrester notes.

Forrester says Westpac excels at functionality.

“Westpac received the highest overall functionality score and emerged second overall in our review, delivering services that are both useful and usable,” Ng said.

“The bank earned full marks for login, letting customers view balances conveniently and offering useful product research and financial tools prior to login. Westpac stood out in marketing and sales; the bank offers relevant products and services to customers based on their immediate needs and information that the bank knows about them.

“It’s also the only bank in Australia that gives customers product comparison tools within mobile banking.”

And, according to Forrester, many Australian banks provide strong login features, giving customers the ability to see the balances without logging in and to use fingerprint biometrics or a quick PIN to log in.

But on a negative note, Forrester also says many banks are weak on service and sales.

“Few banks help customers manage their money better, make relevant product offers, or provide much help through mobile banking,” Forrester says.

It says it also reviewed the mobile services of other leading retail banks worldwide and is publishing these results in separate reports.

Forrester conducted the 2017 Australian Mobile Banking Benchmark between 21 February and 13 March and says the Australian banks it reviewed achieved an average functionality score of 64 out of 100, an average usability score of +6 (on a scale from –30 to +30) – and the individual category scores reveal the differences between the banks’ mobile banking services.

Forrester says some banks are stronger in functionality or usability, while others excel in both areas.

“The other Australian banks have work to do to match the leaders,” Forrester says.

“Most large Australian banks offer a sturdy foundation for mobile banking that meets customers’ basic mobile needs and expectations.

“But apart from CommBank and Westpac, the other Australian banks still have a way to go when it comes to money movement, service features, cross-channel guidance, and marketing and sales.

“Australian banks should give customers the flexibility to schedule future-dated or recurring transfers and to view and search for transactions easily. They should also provide value-added contextualised products and services that help to improve customers’ financial well-being.”

And, according to Forrester, many banks can improve service features and money management.

“None of the Australian banks we reviewed let customers contact the bank via secure messaging or chat to request help. Few banks send customers mobile alerts to warn them of potential security issues.

“Some Australian banks offer basic digital money management, such as setting up a simple savings goal, but the majority does not offer personalised financial guidance or planning tools to help customers achieve their financial goals.”

Forrester says that the most successful banks share a common, iterative approach to mobile.

“Digital teams at leading banks have built strong relationships between their digital business strategy and technology management teams, which work together on a joint business technology agenda.

“They have adopted an iterative test-and-learn process. Cross-functional teams and an agile approach of experimentation, measurement, and quick adjustment have helped drive success at leading banks.

“Westpac uses an Agile framework where digital banking execs, CX pros, product managers, designers, and solution architects work in sprints to develop and test mobile banking products and services.

“Our research is intended to provide a benchmark for the current state of retail mobile banking in Australia and uncover good practices from the banks we assessed. We found best-in-class examples from many of the firms we reviewed. These range from relatively simple features like money transfer options to more advanced capabilities, such as personalised financial guidance and planning tools.”

Forrester says most banks let customers bank through a wide range of mobile touchpoints and, to serve customers in their “mobile moments”, banks have to develop services and design experiences for many different touchpoints, operating systems, and device types, “not to mention mobile browsers and third-party messaging apps”.

“This fractured landscape has driven many firms to adopt approaches like responsive design. CommBank and Westpac support customers on the widest range of devices,” Forrester concludes

Bank App Power Users Are Still Active Branch Visitors

From S&P.

Despite the growing popularity of banking apps, the death knell for brick-and-mortar branches should not be sounded just yet.

In the 2017 Mobile Money survey from S&P Global Market Intelligence, 81% of the mobile bank app users polled said they had visited a branch of their primary bank sometime within the month prior to taking the survey.

What is more, the study showed a higher percentage for those that used their app at least once a day. That is, customers that used their mobile app more were more likely to have visited a branch than those that used their app less than once a day. Based on this, perhaps apps can be viewed as a barometer for the most engaged customers, both in the cyber world and the real world.

But while they may still be going to branches, frequent app users are not necessarily loyal to their banks. The survey showed that daily app users were three times as likely as non-daily users to have switched their checking account to a different bank in the year prior to the survey.  It might be that these frequent app users are hunting for the best possible terms and services, which could include the functionality of the bank’s app. Active users were much more willing to consider opening a checking or savings account with a “branchless bank” (i.e. one with no physical building/office locations).

Deposits and withdrawals were the most commonly cited activities that these so-called power users did inside their bank branch. The same was true for non-daily app users. One of the areas where the two groups notably diverged, however, was savings and investment services. Of daily app users that visited a bank branch in the prior month, roughly 17.7% made use of savings and investment services at the branch. For non-daily users, the percentage was only around 6.4%.

As one might expect, the people that used the app heavily were more open to the idea of a paid app. Daily users were nearly twice as willing as non-daily users to pay a fee of $3 per month to keep using their mobile bank app. The age breakdown of active versus non-active users was also as one might assume. About half of those aged 18 to 25 used their app at least daily, versus 17.6% of those aged 67 and over.In terms of the services they use on the app, daily and non-daily users do many of the same things, such as checking their balance and reviewing transactions. One of the areas where they seemed to differ, though, was transferring money to another person. About 25.7% of daily users said this was a feature they used most, versus around 12.2% for non-daily users.

As far as features they would like to see, daily users were much more likely to want a smartwatch app than non-daily users, which stands to reason. The daily users are likely more tech-savvy in general, and therefore probably want to use the latest technological gadgets.

The 2017 Mobile Money survey was fielded between January 26 and February 1 from a random sample of 4,000 U.S. mobile bank app users aged 18 and older. S&P Global Market Intelligence weighted the data to be nationally representative. Results from the survey, which was conducted online, have a margin of error of +/- 1.6% at the 95% confidence level based on the sample size of 4,000.

The BBC Does Fintech

Interesting programme from the BBC looking at UK developments in Fintech. The discussion centered on how mobile devices are fundamentally changing banking and why incumbents are struggling to respond. Listen to the programme, or download it here.

The UK is a world leader in financial services technology, otherwise known as fintech.

Presenter Evan Davis asks how Britain has beaten Silicon Valley and what challenges fintech poses to traditional banking?

Guests:
Antony Jenkins, Founder and Executive Chairman, 10x Future Technologies
Ishaan Malhi, Founder, Trussle.com
Eileen Burbidge, Co-founder, Passion Capital

The Time For Mobile-Centric Banking

Mckinsey says that Consumer adoption of digital banking channels is growing steadily across Asia–Pacific, making digital increasingly important for driving new sales and reducing costs. The branch-centric model is gradually but unmistakably giving way to the mobile-centric one.

Deferring the development and refinement of a digital offering leaves a bank exposed to the risk of weakened relationships and lower profitability. Now is a critical moment to draw retail-banking customers toward Internet and mobile-banking channels, regardless of the general level of network connectivity in a given market.

Our annual study, the Asia–Pacific Digital and Multichannel Banking Benchmark 2016, was led by Finalta, a McKinsey Solution, and examined digital consumer-banking data collected between July 2015 and July 2016 from 41 banks. This article focuses on our findings from Australia and New Zealand, Hong Kong, Malaysia, Singapore, and Taiwan, examining consumer digital engagement, user adoption, and traffic and sales via Internet secure sites, public sites, and mobile applications.1 We detail three counterintuitive findings, and make suggestions for how banks should move forward.

Three counterintuitive findings

Consumer use of digital banking is growing steadily across all five markets (Exhibit 1). In the more developed markets of Australia and New Zealand, Hong Kong, and Singapore, growth in recent years has been concentrated in the mobile channel. Indeed, among some banks use of the secure-site channel has begun to shrink, as some customers enthusiastically shift most of their interactions to mobile banking. In emerging markets, growth is strong in both secure-site and mobile channels.

Consumer adoption of digital banking is growing steadily across all markets.

Three counterintuitive findings point to the need for banks to act aggressively to improve their use of digital channels to strengthen customer relationships.

First, banks can excel in their digital offering despite limitations in the digital maturity of the markets they serve. One measure of digital maturity is the Networked Readiness Index (NRI), published annually by the World Economic Forum. This scorecard rates how well economies are using information and communication technology. It examines 139 countries using 53 indicators, including the robustness of mobile networks, international Internet bandwidth, household and business use of digital technology, and the adequacy of legal frameworks to support and regulate digital commerce. Comparison of digital-banking adoption with the level of networked readiness reveals that a country’s level of digital maturity does not necessarily promote or inhibit the growth of a bank’s digital channels.

Singapore, for example, has the most highly developed infrastructure for digital commerce in the world. However, when it comes to digital banking, Singaporean banks trail their peers from the less-networked markets of Australia and New Zealand, where banks have been able to draw consumers to digital channels despite gaps or weaknesses in digital connectivity.

Some banks have also been successful in pushing mobile banking regardless of network limitations (Exhibit 2). While Australia and New Zealand have moderately high levels of third-generation (3G) and smartphone penetration (trailing both Hong Kong and Singapore), the banks surveyed have achieved much stronger consumer adoption of mobile channels than their peers in other markets.

Mobile banking can also grow despite a market’s limited mobile-network infrastructure.

The second key finding is that having a relatively small base of active users does not necessarily mean low traffic (Exhibit 3). Among all participating banks in our survey, banks in Malaysia report among the smallest share of customers using the secure-site channel; however, these customers tend to log on many times a month, and the typical secure-site customer interacts with the bank more than twice as often as the secure-site banking customers of participating banks in Hong Kong and Singapore.

Low channel adoption does not necessarily mean inactive users.

Third, the survey data reveal wide variations in performance across key metrics by country. In Australia and New Zealand, for example, there is wide variation in digital-channel traffic, with customers logging on with 32 percent more frequency at participating banks in the upper quartile than those in the lower quartile. In Hong Kong, digital adoption among upper quartile peers exceeds that of the lower quartile peers by ten percentage points. Participants in Singapore observe a sixteen-percentage-point gap between the upper and lower quartile peers in the proportion of sales through digital channels.2 The wide gap between best and worst in class in multiple markets points to a significant opportunity for banks to beat the competition with compelling digital offers.

What banks should do

Banks in emerging markets have an opportunity to leapfrog to digital banking. Despite gaps in technology and smartphone penetration, a number of banks have tapped into consumer segments eager to adopt digital channels. Banks in emerging markets should prepare for rapid consumer adoption of digital channels. The digital evolution in emerging markets will differ considerably from the trajectory of banks in more developed markets.

Banks in highly developed markets have room to grow their active user base and digital sales. Indeed, the cost and revenue position of banks that do not act to improve their digital offering may weaken relative to peers that shift more business to digital channels. Banks in all markets should plan for this transition, especially through the integration of diverse technology platforms, the consolidation of customer data across multiple channels, and the continuous analysis of customer behavior to identify real-time needs. It is important to build services rapidly and to go live with minimally viable prototypes in order to attract early adopters—these digital enthusiasts eagerly experiment with new features and provide valuable feedback to help developers.

The significant variation of performance among countries shows great potential for banks to boost digital engagement with a dual emphasis on enrollment and cross-selling. Banks should carefully consider four best practices that often bring immediate gains by streamlining the customer’s digital experience:

  1. Deliver credentials instantaneously upon in-app enrollment. The global best practice shows that banks that issue credentials instantaneously through in-app enrollment see their mobile activity rise on average 1.5 times faster. Of the banks that provided data on functionality, more than 50 percent do not have in-app enrollment. This presents a significant value-creation opportunity.
  2. Simplify authentication processes to make them both secure and user friendly. Approximately three in five banks surveyed lack the ability to authenticate a user’s mobile device. In our experience, banks that store device information and allow users to log on simply by entering a personal identification number or fingerprint see three times more digital interaction than banks that require users to enter data via alphanumeric digits each time they log on.
  3. Implement ‘click to call’ routing to improve response times. Instead of using a voice-response system, where customers must listen to a long list of options before selecting the relevant service choice, an increasing number of mobile apps are adopting click-to-call options for each segment, enabling customers to bypass the voice-response menus. Of the banks that provided data on capability, only 30 percent in our Asia–Pacific survey offer authenticated click-to-call options. The improvement in customer service is significant, with global banks able to improve the speed of answering customer calls by up to 40 percent.
  4. Make digital sales processes intuitive and simple. Take credit cards as an example: best-practice global banks achieve average conversion rates (the ratio of page visits to applications) some 1.6 times those of Asia–Pacific banks. They do this by presenting products and features for which a customer has been prequalified through an intuitive, easy-to-read dashboard display or via tailored messages. Application forms are prefilled automatically with customer data. With intuitive and simple applications, banks in the Asia–Pacific region could increase the rate of completed applications by 22 percent, to come up to par with global best-practice banks.

Across the five markets we focused on, the branch-centric model is gradually but unmistakably giving way to the mobile-centric one. Looking at how digital-channel adoption and usage is evolving, along with the diversity of scenarios, banks have ample room to win in their target markets with a carefully tailored digital offering. Digital-savvy consumers warm quickly to well-designed and easy-to-use digital-banking channels, often shifting to the new channel in a matter of days. Banks need to act quickly to improve their customers’ digital experience or risk being left behind.

Lost or stolen cards replaced instantly with ANZ digital wallets

ANZ today announced its customers can continue to use their digital wallets when they report their card as lost or stolen with a new service that automatically updates their replacement card details.

As soon as a customer calls to report their debit or credit card as missing, ANZ puts a stop on the original card and automatically uploads the new virtual card details to the customer’s digital wallet.

ANZ Managing Director Products Australia, Katherine Bray said: “Our customers report about 670,000 cards as lost or stolen each year and we know waiting for a new card to arrive can be a real inconvenience.

“Now our customers can keep using their digital wallet, whether it’s Apple Pay or Android Pay, to make purchases while they wait for the new physical card to arrive in the mail.

“For many customers their smartphone is now the primary way they do their banking, including making purchases, so we’re working hard to keep improving their mobile experience with changes like this.”

ANZ has also made it possible for customers to keep their existing Personal Identification Number (PIN), provided it hasn’t been compromised, meaning less change with the same high level of security.

ANZ is the only major Australian bank to offer both Apple Pay and Android Pay with about 8.3 million transactions made across the bank’s digital wallets last year.

Citi’s Mobile First Strategy

Good piece in the McKinsey Quarterly where the bank’s Head of Operations and Technology, Don Callahan, describes the bank’s efforts to accelerate its digital transition. Watch the video.

mobile-pic

We know we have to be mobile first, and we are doing a lot there. In order to be all-in on mobile, we have set up a “lean team” in our Long Island City office, with about 100 people who are operating in a very agile way.

Callahan surveys the 21st-century banking terrain: digital competitors are massing on every front—from fintech start-ups to new divisions of global institutions—while the speed of every banking process and customer interaction accelerates daily. All this change requires a focus on agility, Callahan says, which in turn demands a cultural rewiring.

At the helm of Citi’s digital transformation, Callahan is helping drive new thinking across the bank. He points to Citi’s digital lab for start-up innovations, powerful new apps for customer smartphones, and, internally, a push to expand capabilities across cloud computing and big data and analytics that enable automation and machine learning. In an interview with McKinsey’s James Kaplan and Asheet Mehta, Callahan describes what it takes to mobilize digital change at one of the world’s leading financial institutions.

 

No Credit History? No Problem.

From Bloomberg.

Financial institutions, overcoming some initial trepidation about privacy, are increasingly gauging consumers’ creditworthiness by using phone-company data on mobile calling patterns and locations.

The practice is tantalizing for lenders because it could help them reach some of the 2 billion people who don’t have bank accounts. On the other hand, some of the phone data could open up the risk of being used to discriminate against potential borrowers.

Phone carriers and banks have gained confidence in using mobile data for lending after seeing startups show preliminary success with the method in the past few years. Selling such data could become a more than $1 billion-a-year business for U.S. phone companies over the next decade, according to Crone Consulting LLC.

Fair Isaac Corp., whose FICO scores are the world’s most-used credit ratings, partnered up last month with startups Lenddo and EFL Global Ltd. to use mobile-phone information to help facilitate loans for small businesses and individuals in India and Russia. Last week, startup Juvo announced it’s working with Liberty Global Plc’s Cable & Wireless Communications to help with credit scoring using cellphone data in 15 Caribbean markets.

And Equifax Inc., the credit-score company, has started using utility and telecommunications data in Latin America over the past two years. The number of calls and text messages a potential borrower in Latin America receives can help predict a consumer’s credit risk, said Robin Moriarty, chief marketing officer at Equifax Latin America.

“It turns out, the more economically active you are, the more people want to call you,” Moriarty said. “That level of activity, that level of usage is what’s really most predictive.”

 

The new credit-assessment methods could allow more people in areas without bank branches to open accounts online. They could also make credit cards and loans more accessible and prevalent in some parts of the world. In the past, lenders mainly relied on bank information, such as savings and past loan repayments, to judge whether to let someone borrow.

NAB Announces New Mobile Banking App

NAB says customers will have more control over how, when and where they use their cards, thanks to NAB’s new Mobile Banking App to be launched later this year.

Fintech-Pic

The new App will include world-leading card transaction controls, making it easier for customers to conveniently and instantly self-manage their personal Visa debit and credit cards through their mobile device.

And, in an Australian first, NAB customers will be able to instantly use newly approved personal Visa credit cards, with an innovative digital contract feature in the new App not seen anywhere else in the world.

This means customers will be able to instantly use their new credit card through NAB Pay for contactless transactions less than $100, without having to wait for their physical card to arrive in the mail.

“This is a whole new platform for a new era of NAB mobile banking,” NAB Executive General Manager of Consumer Lending, Angus Gilfillan, said.

“Our new App will be fast and seamless, and has been designed to make banking as convenient and easy as possible for our customers.”

“We want to give our customers more control over their everyday banking, and our new App will help them to do this with the tap of a button.”

NAB announced a strategic partnership with Visa in November last year, which was designed to accelerate the delivery of payments innovation and product development for customers. Through this partnership, and utilising the capabilities Visa made available through its Visa Developer platform, NAB was able to enhance the card transaction control features in its new Mobile Banking App.

“We’re really pleased to have been able to open up our capabilities which is delivering speed to market and innovation,” Global Head of Visa Developer, Mark Jamison, said.

“By directly connecting Visa and NAB developers through the Visa Developer program, the NAB team was able to save around six months of development time.”

These card transaction control features will enable customers to select and modify when and how their Visa debit and credit cards can be used.

“Customers will be able to control what type of payments can be made through the App; for example, if you’ve provided a secondary card to a family member, you can choose “Don’t Allow” for online purchases on that card,” Mr Gilfillan said.

NAB’s new mobile banking experience will include a range of other features, including the ability for customers to place a temporary block on any card that may have been lost or stolen.

“NAB is absolutely focussed on improving the customer experience, and our new App will give customers more control of their cards so it better suits their individual needs,” Mr Gilfillan said.

The new App will also see improvements to existing features and functions in NAB’s current Mobile Banking App, and, with a new look and feel, it will be easier for customers to login, view account balances, and search past transactions.

An open pilot of the new App will commence soon for compatible Android devices, providing thousands of customers the opportunity to provide feedback. Customers who would like to participate in the pilot will be able to visit the Google Play Store and download the new App. Customers with iOS devices will also be piloting the App over coming weeks.

“Our customers have been and will continue to be extensively involved in the development of our new App because we are absolutely committed to delivering our customers the experience they want,” Mr Gilfillan said.

During the pilot and after the App is launched in full later this year, features on the App will be released in stages.

NAB will also this week launch its new NAB PayTag to customers, a sticker which can be attached to mobile devices to enable contactless payments linked to a customer’s Visa debit card.

“We’re always looking for opportunities to provide our customers with innovative products and services, features and functions, to help them do their banking easier and take control of their finances,” Mr Gilfillan said.

Mobile First IS Banking’s Imperative

We recently released the latest 2016 edition of our banking channel report ‘The Quiet Revolution”, which is available on request. Our April Video Blog summarises the main findings.

The Quiet Revolution highlights that existing players need to be thinking about how they will deploy appropriate services through digital channels, as their customers are rapidly migrating there. We see this migration to digital more advanced among higher income households but momentum continues to spread. So players which are slow to catch the wave will be left with potentially less valuable customers longer term. Players need to adapt more quickly to the digital world. We are way past an omni-channel (let them choose a channel) strategy. We need to adopt a “mobile-first” strategy. Such digital migration needs to become central strategy because the winners will be those with the technical capability, customer sense and flexibility to reinvent banking in the digital age. The bank branch has limited life expectancy. Banks should be planning accordingly.