MyPrivateBanking Blog
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Archive for April, 2015

Deutsche Bank’s real challenge is digital (and they are throwing 1 billion at it)

Thursday, April 30th, 2015

Everybody is talking about Deutsche Bank’s plans to sell the Postbank network and to slim down its own branch network. Many pundits think that’s too little too late and they are missing the big strategic vision of Deutsche Bank’s co-CEOs Fitschen and Jain. But these pundits are not getting the real point: Deutsche Bank has announced to invest EUR 1 billion in digital technology over the next 3-5 years in addition to what they’ve already planned to invest. That’s a big number and it’s a good decision.

Today, Deutsche Bank’s customer facing digital touchpoints are only mediocre. For instance, in our Mobile Apps for Banking report 2014 they are ranking only 18th out of 40. In our ranking on Mobile Apps for Wealth Management 2014 DB fares even worse, being on rank 22 out of 30. In social media Deutsche Bank is showing more strength as they rank number 1 for corporate social media (out of 20 global banks). But again, they can get only to rank 17 and 18 for their usage of social media in retail banking and wealth management respectively (check our report on Social Media in Banking 2014).

So what’s the conclusion? There is a lot to do for Deutsche Bank to transform itself into a truly digital bank, offering seamless mobile, online, social and offline touchpoints to their clients. It’s a big challenge but the CEOs have taken the right decision: Digital must be priority number one for Deutsche Bank (as for any globally operating bank worldwide).


How Starbucks is winning the mobile payments war

Wednesday, April 29th, 2015

Technology giants, start-ups and retailers like Google, PayPal, Starbucks, Square, and Stripe have moved on from just threatening and competing against the traditional banks to dominating the mobile payments arena.

Starbucks is the new model of success in mobile payments with an impressive comeback after the unsuccessful partnership with Square in 2014. The Seattle-based coffee giant has made mobile payment strategy a top priority and continued to invest in its own in-house mobile payment systems. The result is remarkable: over 8 million mobile transactions per week, 16 million active users of its mobile app, which translates into nearly 19% of all mobile transactions in US stores.

The brilliant idea behind Starbucks’ “Mobile Order & Pay” system combines the convenience of a simple payment tool, which works on the majority of smartphones, with the benefit of a well-thought loyalty program. The app’s success is not only driven by the ease of payment (“shake to pay” and give a digital tip to the barista) but also by the remarkable set of supplementary features (loyalty program, manage Starbucks card, send Starbucks gifts to friends etc.).

There is yet no confirmation about a possible white-labelling solution of the mobile payment app. However, ‘Mobile order& pay’ will surely trigger a wave of similar solutions either brought up by tech giants or by other consumer companies willing to pay the price for a bespoke solution. Either way, given the rapid acceleration in mobile device purchases and millennials’ hunger for convenient mobile payment solutions like digital wallets, credit card companies and banks are vulnerable to lose a substantial number of mobile customers.

At MyPrivateBanking we believe that customers will choose a non-bank mobile app over a bank’s mobile solution if it offers more convenience and interesting add-on features. It is not enough for banks to launch their own mobile wallets. To gain market share and penetration banks need to think hard about the smart add-ons for their payment solutions: Loyalty programs, preferential treatment when ordering or buying things in high-profile store chains, and many other innovative features will require banks to think like FMCGs (fast moving consumer good companies) rather than old fashioned retail banks. This will be the hardest challenge.


Apple Watch launches serious smartwatch banking

Friday, April 17th, 2015

The launch of Apple’s new smartwatch undoubtedly provokes completely new strategic considerations for banks and wealth managers. While the Android Wear admittedly did not cause a disruptive change in the digital device landscape, the omen with regard to the Apple Watch looks completely different.

While Android shipped only 720,000 of its smartwatches in 2014, Apple Watch pre-orders alone add up to 1 million already now in the U.S. It will well be worth keeping an eye on these numbers until launching date at April 24, 2015.

The continuous developments in the fields of wearable devices should start ringing a bell for banking and wealth management app developers. Having started with this year’s evaluation of the mobile apps of the top 30 wealth managers worldwide, we are excited to see who the early adopters are. Given the extremely cautious attitude, the financial sector usually shows towards new technological developments, exceptions like BNP Paribas are particularly noteworthy. Among the early adopters, the French bank offers a smartwatch application to their customers, which allows them to check their accounts when on the go or contact their personal advisors.

We are convinced that this will only be the beginning as the penetration of smartwatches is likely to increase substantially. We expect that wearable devices will be a game changer for mobile banking, adding numerous useful features for clients.

Check out our new Research Briefing, which will be published next week, to learn about how the Apple Watch might actually add value to banking customers and which considerations banks should keep in mind when entering this new digital field.


Why a simple P2P payment feature will be a must for any banking app

Wednesday, April 1st, 2015

We’ve seen it before: sooner or later, cross-industry trends like customer service via video chat have strong potential to conquer the banking space, as well. While video chat features are slowly becoming standard among the more elaborate mobile apps, mobile and desktop websites, new add-ons are already on their way.

As Facebook recently jumped on the train of P2P payment with their Messenger app, it is more than likely that the use of such features will skyrocket given the masses of Facebook users worldwide. P2P payments are defined as an online technology that allows customers to transfer funds from their bank account or credit card to another individual’s account via the Internet or a mobile phone using a simple and quick process.

Hence, it is just a matter of time that financial institutions – be that retail banking or wealth management – face the need of implementing P2P payment features for their mobile touchpoints. Starting the research on mobile apps for wealth management for our new report (see last year’s edition here), we already see some frontrunners among the 30 top players in this respect; one example is the great DBS PayLah! app, which allows customers to split bills, send money to or request money from friends, and even donate money to selected charities in an easy way.

Considering these and other ground-breaking technological developments, we are particularly curious to see, how the top wealth managers worldwide perform this year.