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From ATMs to apps and beyond

Sahil Mungar
By Sahil Mungar, Head of sales and marketing for FNB Mobile & Connect.
Johannesburg, 24 Apr 2014

It all began with a Hole in the Wall. Or, by its more common name, an automated teller machine (ATM). This was technology's first date with the banking sector. And, as first dates go, it went remarkably well.

In SA, over 31% of the population is now using mobile phones to transfer money. This has increased from 18% just three years before.

The ATM marked the beginning of a dynamic and constantly evolving relationship between banking and technology. Invented by IBM, the first ATM/Hole in the Wall was introduced in December 1972 at Lloyds Bank in the UK.

It was the first time a computerised telecommunications device could provide people with access to financial transactions (in a public space) - without the need for a cashier, clerk or bank teller. The revolutionary idea of self-service in retail banking quickly caught on through various independent efforts in Japan, Sweden, the UK and US. Today, most of us couldn't conceive the idea of a banking sector without ATMs.

Convenience catches on

As society began to embrace the idea of not needing to go into a bank every other week, the sector took its blossoming relationship with technology to the next level: the telephone. With the growing demand for convenience and remote access, telephone banking allowed customers to perform transactions from the comfort of their homes or businesses. Over time, with the obvious exception of cash withdrawals and deposits, telephone banking soon offered virtually all the features of an ATM.

The next step saw technology and banking basically 'move in' together. As the World Wide Web entered homes and businesses around the world, the banking sector recognised the need to go online in order to remain current and accessible.

The concept of online banking as we know it today dates back to the early 1980s. However, it was only in 1995 that Presidential Savings Bank first announced the facility for regular client use in the US and soon financial institutions around the world were going online. These days, many banks operate solely via the Internet and have no 'four-walls' entity whatsoever.

Mobile becomes king

Following its move to the online sphere, the banking sector naturally progressed to what has arguably become everybody's most essential communications tool: the mobile phone. The first mobile banking services were offered via SMS and with the introduction of the first primitive smartphones (with WAP support enabling the use of the mobile Web in the early 2000s), banks started to offer mobile banking on this platform to their customers.

In SA, over 31% of the population is now using mobile phones to transfer money. This has increased from 18% just three years before. Not only is this percentage increasing but other, newer transactions are now available like geo-aware payments, wallet-based payments, and innovations like iTunes vouchers, electricity tokens, and payment of traffic fines.

Birth of the banking app

Having made it this far together, the banking and technology match produced an intuitive and gesture-driven banking experience through a banking app. Developed by a team of innovators within FNB, the FNB transactional banking app was the first of its kind in South Africa.

Existing technology remained - ie, payments, transfers, balances, statements and prepaid purchases - but location-based services, finding branches and ATMs, and more innovatively, making peer-to-peer, proximity-based payments (GeoPayments), were now made possible through the access the app had to the environment via the smartphone and its built-in sensors.

In addition to allowing customers to quickly and safely conduct their banking using their smartphones or tablets, banking apps give users the added convenience of being able to send messages and make free calls from one app user to another, as well as to call centres and personal bankers.

Apps also have the ability to not only know where you are located and intuitively interact with you, but through real-time feeds the app becomes a tool that is immediate and instantly relevant. By way of example, stock exchange feeds allow users to keep track of investments and make investment decisions immediately.

Why the future will be mobile first

As banking and technology become ever more intertwined, the innovations will continue. Several new and greenfields concepts are currently being tested, with customer value and demand being at the centre of the nucleus.

Newer technologies recently introduced on the market will further shape the landscape. Smart watches, heads-up displays such as Google Glass, and in-vehicle apps and telemetry will extend the limits of technology to the consumer.

Banking and technology have become inseparable and will without a doubt continue to innovate and improve in partnership with one another.

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