The iPad Value Curve For Financial Services

This is a guest blog post written by Shahab Choudhry, co-Founder and Partner at Propelics, a Zenprise strategic partner focusing on iPad Strategy and iOS Application Design and Development for the Enterprise. He can be reached at shahab.choudhry@propelics.com and you can read his blog posts at http://www.propelics.com/blog.

Despite banking's reputation for sometimes being a late adopter of technology, that is not the case with the adoption of the iPad. In fact, several surveys suggest that the Financial Services Industry is leading the way when it comes to the adoption of iPads compared to other industries. With banks struggling to rebuild relationships with their customers, many bankers hold high hopes that the iPad can help lead the industry out of a decidedly rough patch.

There is good reason for that optimism. The iPad's advances are remarkable: instant-on capability, multi-touch interaction, wi-fi connection to the Internet, and a high-resolution screen to state just a few. The ease of use is extraordinary. Web pages load almost instantly, screens scroll with ease, and moving back and forth between apps is a breeze. Notable for making tasks simple, effective, and user friendly, the iPad lets users tap into the mobile world and a world of apps. So its popularity among consumers was bound to spill over into the corporate world.

But in the corporate world, iPad adoption is one thing. Value is another. Not all apps are created equal. As with any technological advance, only marginal gains come from optimizing current functionality. Like blades that shave closer or beer that's less filling, iPad apps that facilitate online banking through a mobile device instead of a laptop are handy and popular, but they don't move the loyalty or profit needle much.

Low-to-high, the iPad value continuum for banks looks like this:

• Customer Use Apps: These are what you see on the Apple AppStore™ today. They are applications built by businesses that help customers interact with the business. A shopping application to view a storefront, purchase items, or manage orders or an insurance application to let the policyholder view policy information, look up the agent's contact information, and pay the premium. In banking, these would be apps to view your checking balance, deposit checks, or transfer money.
  
  They take functionality already available on the bank's web site and put it out on mobile – phone or tablet. Increasingly, these apps are just table stakes – you can't be without them but offering them creates limited loyalty or revenue.
   
• Coolness Apps: A few banks are adding what might be called Coolness apps—in some ways these apps are just extensions of apps in the previous category. They do add some tablet/phone specific capabilities for the consumer. Typical features would be location functionality to find the nearest branch or ATM. Customers like these apps and use them, and might associate them with the bank's brand, but any modest revenue they generate is indirect.
   
• Utility Apps: Next up the value chain are the applications being custom-built and used internally to improve employees' work environment or streamline internal processes. They are distributed by the bank's IT department to managed iOS devices used by bank employees.
  
  We often see this category represented by Outlook email, Calendar, and Address Book, made available on the iPad. Undeniably, if done right, this makes employees happy and more productive – nobody likes to go to work and take a step backward technologically from what they can do in their personal lives.
  
  Security and privacy issues lurk in the details, especially if the mobile device is owned by the employee. When an employee quits, for example, the bank needs to be able to automatically delete certain information. In the iPad's early days, privacy and security were CIO nightmares, but they are being solved rapidly. Deployment of these types of apps has been the trigger for starting conversations related to Mobile Device Management (MDM) platforms. As an example Zenprise provides the capabilities to be able to manage these devices, enforce policies and ensure that these devices can be locked or wiped remotely.
   
• Internal Facing Apps: A next step up the value chain would be purpose-built apps, often narrowly focused, that let iPad users perform a corporate function significantly more quickly and easily than they could before or collaborate swiftly and openly by tapping into back-end systems such as core banking platforms. Examples are proliferating: apps for booking conference rooms, applying for vacation days, submitting expense reports. Think of this category as social media within the enterprise.
  
  In this space would be compliance-related training of remote employees and dashboard apps that provide iPad users with real-time business performance indicators. Standard Chartered Bank has a proprietary TradePort app that lets their Trade Finance employees use their iPhones to perform and monitor trades with full security. The bank also has an FX Rates app, providing real-time visibility into the bank's internal foreign exchange rates and ratios between currencies. Apple highlights this case study as an example on its website.
   
• One-on-One Customer Interaction Apps: The pinnacle of iPad value to the bank is where employees can use the iPad in their direct interactions with customers to help them serve and/or upsell customers one-on-one. These are apps built by the bank in the presence of customers. Talk about just-in-time development.
  
  Traditionally a new accounts banker signing up a new customer might have to open half a dozen different systems, go to a filing cabinet for a couple of brochures, to the display rack for the latest fee schedule (or even telephone someone). But with all that information assembled on the iPad, the banker can work side by side with the customer to compare features, rates, and other options, answering any questions on the spot and then signing up the customer without ever leaving his side, creating a coherent, fluent, and personal experience.
  
  A banker equipped with an iPad might also anticipate questions and group likely answers and solutions for various scenarios. Suppose a customer walks in with a $1,000 check to deposit. Instead of simply taking the deposit, what are all the options that it would make sense to offer under those circumstances?
  
  Imagine such an app deployed in service of loan modification, where lost documents, changing laws, and confused customers and staff combine to create a costly and risky function. Or even mortgage loan origination, where the mortgage banker could assemble the piles of documents that comprise the file and perform what-if analysis on payment scenarios.

Banks need to keep this value curve in mind as they plan their portfolio of apps. Additionally, the considerations for each category of apps vary somewhat due to the difference in the target audience for each type of app.