What banking on a mobile phone should look (and feel) like

For most of us, there’s zero fun in dealing with financial issues, and banks aren’t synonymous with the latest must-have mobile apps. That, however, hasn’t stopped people from banking on their mobile devices.

A recent BMO survey showed 70 percent of Canadian smartphone owners use banking apps. The trend is increasing too, with two-thirds of users having downloaded a financial app over the last 12 months.

Canadian financial institutions are notoriously conservative, something that worked in their favour during the financial crisis, but which has slowed the pace of innovation when it comes to integrating mobile devices.

“The technology is still not mature,” says Robert Smythe, a financial sector analyst at IDC Canada. “A lot of the decisions they’re (banks) making are almost on hope and faith rather than on solid information.”

Smythe adds that large retailers like Walmart, Canadian Tire and Loblaws are making inroads into the financial services industry and are working on their own “mobile wallets” to give consumers a fully integrated experience.

“So we’ve got the banks now facing some new competition they haven’t faced before and having to work very rapidly to protect their domain.”

ING Direct’s approach

ING Direct, recently rebranded as Tangerine, has been a leader in the mobile banking space since launching in Canada in 1997. With no physical branches, taking advantage of online and smartphone technology has been at the core of the company’s growth.

This summer ING Direct launched an app that allows users to virtually cash a cheque by taking a picture of it with the camera on their phone. Since late July, more than 70,000 cheques have been processed using the app, says Charaka Kithulegoda, ING Direct Canada’s chief information officer.

The technology took about eight months to develop and a key part of that was making sure it delivered a great user experience, Kithulegoda says.

“Simple and relevant are the keys,” but Kithulegoda confesses they recently tweaked the app, because about 10 percent of the images were too “blurry” to process. “We missed a bit on the usability part. We were losing image quality when people pressed the button.”

The updated version allows users to hover their camera over the cheque and the app automatically focuses and takes the picture. “The more human interactions you can take out – especially on a mobile platform – it’s going to remove the point of friction, improve usability and increase engagement.”

Using your phone to deposit a cheque, pay your bills, transfer money or check your account balance are all pretty mundane tasks, but far more exciting things are on the horizon.

What the future holds

Banks are just scratching the surface with opportunities such as near field communication (NFC), GPS, social media and the huge data mining opportunity it represents. The big challenge in all this is to maintain security thresholds so that users trust the technology.

“We are looking at biometrics very actively,” says Kithulegoda on the science of identifying users by their biological characteristics or traits. “We can use the camera, voice and fingerprint scanner on an iOS device to enhance the level of security.”

Using sites like Facebook and Twitter to sign into your banking account provides a very tantalizing option for banks eager to access that wealth of personal information.

Dominira Saul, director of user experience design for Toronto-based Web services firm Akendi, often uses his smartphone to pay bills and says this practice will only increase as online payment systems and apps become more sophisticated and secure.

“There are potential linkages in terms of how service providers, consumers and banks interact with each other that can really simplify the process,” says Saul, who believes that as financial institutions improve the mobile user experience it will transform the way people think about banking.

“It’s going to become one of those things we use without even thinking about it, like e-mail,” he adds. “Everything is going to be integrated through that hub that is the mobile device.”