Winning With Apple Pay: Transforming Banking

apple pay

If we were the exec board of one of the UK banks, we would be on the phone this morning speaking with Apple and network providers.

If you missed it (not sure how you could), amongst all the glitz and wow of the apple launch last night (09/09/2014) Apple Pay, Apple’s foray into mobile payments was announced and showcased. It looked good. It worked great.

There are, as always, those that chose to find the flaws and felt misplaced pride in arguing, mainly through twitter, with anyone and everyone that Apple Pay fell short of what it could be. “Bah Hambug” they say.

We disagree with the killjoys. Although we have generally been less than positive on the existing mobile payment solutions and their potential impact on payments, we are happy to have changed our minds:

Apple Pay will fundamentally revolutionise the banking  industry.

If we ran a UK bank, our eyes would be lighting up. Opportunity is what we see. Apple Pay will come to these shores sooner rather than later. Rather than be a follower and adopter, we would want to lead the revolution, to drive our customer acquisition and make our stamp as a bank for the future.

Apple Pay is not like previous mobile payment solutions. It is delivered by the handset manufacturer, not by a 3rd party. And we have all witnessed the power this particular manufacturer wields when it comes to consumer adoption and behaviour. Yes they have made a few mistakes in the past, but Apple Pay will not join them.

If we ran a UK bank we would want to be the first bank to distribute the iPhone 6 and Apple Pay instead of cards to our customers.

We are deadly serious; we believe this strategy would spur a massive drive in customer acquisition as well as light the fire for new and improved product development processes within our institution. Innovation would be ingrained to our brand.

Today, we are tied to mobile phone contracts to subsidise the cost of handsets. We pay these bills from our bank accounts. The device is independent of the financial services we receive. We can chose to use it to assist our financial management, banking, payments, but there is no real compulsion. Everyone sees the potential of mobile in relation to financial services, but the implementations have not yet fulfilled.

By issuing the phone instead of a card, we believe we would intrinsically tie the phone to banking and drive the use of services, none more so than payments and the supplemental and valuable loyalty and rewards that are overlaid.  We would take ownership of the contract for the device, still delivered and serviced by the network providers, but channeled through our bank.

The cost for the handset could be met through fees (paid to the bank rather than the network provider) or perhaps even through minimum spend or balance obligations; nothing onerous and inhibiting (these are usual even today in many countries, including the US). Given data, we may look at our customer acquisition costs and see how our new strategy may allow us to contribute to the cost of the handset without increasing our overall spend.

Of course, we would be silly to just provide the handset to our customers without bundling some  apps into the package. User friendly (The key) account view/management, offers/rewards, FX, wealth management, PFM….. An opportunity not to be missed; pre-supplied and ready to use on a device that is is psychologically tied to our bank in the eyes of our customer.

We would need to brainstorm, test and build these apps; fast – ready for launch. Well, build them faster and better than we have previously been able to do. All those proposals for new process and methodology that we have discussed to death; Lean, RAD, prototyping, outcome driven and disruptive innovation…. the transformation of our business and the implementation of new and better product development would be driven forward by our handset strategy.

We will emerge a better, more capable bank. We will have changed the way the industry competes. We will have improved services for our customers. That is real innovation.

If you would like to talk through our proposition; contact us.  There is a lot to discuss around this intricate and groundbreaking proposition. But it is worth it; we can help you define, implement and win.

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