Global Banking and Finance Review: Vice-President of Cognizant’s Banking and Financial Services Practice in the UK Outlines a Roadmap for Mobile Payment Success

The rapid rise in mobile banking and payments is making traditional bankers sit up and take notice, writes Tony Virdi. “Customer experience is the key. The opportunity to instantaneously personalize banking products via digital channels, for example, helps to reposition both banking and non-banking services, increase wallet share and income, and hence provide an important driver for change,” he adds. “Digital bankers are rapidly becoming the new power base.”

Virdi observes that mobile payments are truly disrupting traditional banking. Smartphones, he notes, are becoming payment acceptance device, thereby reducing the time to bring on board new merchants and also reducing cost of transaction. “This also provides a platform for entirely new loyalty-based products, and will complement the consumer’s desire to use mobile technology for payments.”

According to Virdi, while banks are increasingly focusing on m-commerce as a means of both providing better customer service as well as enhancing their top lines, an uptake of mobile payments has brought risk with it. “Whether anti-money laundering (AML), fraud, device theft or shoulder surfing, this is no different to any other new technology. In the case of mobile payments, the interesting aspect is that these risks converge with those of the financial services and telecommunications industries. The regulators, telecom operators, regulated firms and vendors will need to work closely together to parry the threats of fraud.”

Key to encouraging mobile payment adoption among consumers, he states, is ease of use and a ‘risk-free’ customer experience marked by continued high levels of security. “For banks, financial institutions and retailers, more interoperation and cooperation is required if they are to benefit from this disruptive consumer driven change to traditional payments and banking,” he writes. “The wind of change is rife, and it is progressively being driven by consumer demand as they seek new channels for payments (and communication), and it is up to banks to embrace this disruption at pace to retain their relevance and move with the times.”

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