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Mobility and Financial Services: We've Only Just Begun

Posted by Jim Eckenrode, executive director, Deloitte Center for Financial Services, Deloitte Services LP, on May 14, 2014

Advances in mobile technologies proceeded slowly from the time of the inception of the first cellular networks in the late 1970s to the development of multitouch "smartphone" technology about seven years ago. Since then, we've seen an explosion in device and network capabilities, driven by consumers who have rapidly adopted these new technologies and are in many ways pushing handset manufacturers, telecommunications carriers and businesses of all types to adapt further to the increasingly mobile world.

In the financial services industry, firms have worked hard to engage with their clients through this channel. But given the pace of technology advancement in the mobile space, firms should be planning to rethink how mobile device technologies may advance in unanticipated ways. Indeed, the performance and capacity of mobile devices may have doubled even more frequently than every 18 months, a ratio of technology advancement codified in "Moore's Law," and it will likely be more of the same going forward. So, what next?

The Deloitte Center for Financial Services, in conjunction with Deloitte University Press, will be publishing a series of reports that seek to address this question, beginning with Mobile financial services: Raising the bar on customer engagement, scheduled for a May 19 release via dupress.com. Based on a survey of more than 2,000 individuals, our research has found that mobile adoption across financial services has been a crazy quilt of equal parts unawareness, skepticism and impatience with financial services providers.

Whatever the response to date, there appears to be much more to come. Until now, mobile financial services have essentially replicated the online experience onto a handset or tablet. In the not-too-distant future, new technologies will likely be added to the mobile platform that take advantage of its ability to know where it is, see what is around it, communicate with other local devices and connect with information sources that have yet to be deployed. Indeed, convergence of mobility and the "Internet of Things" (see my colleague Val Srinivas' post on this topic here) offers an example of what might develop with regard to sensing technologies.

Onboard sensors today include accelerometers, compasses, cameras, microphones, pedometers, GPS, proximity and ambient light detectors, and gyroscopes. Future developments will likely include the ability to detect temperature, pressure, eye movement and gestures, location and magnetic fields.1

One might imagine how sensors could be used in new ways, based on their ability to connect one's device to many others in the surrounding area and to analyze population movement and behavior through inputs from many mobile devices. In the first case, beacons and other sensors are being embedded into billions of objects, bringing the real and digital worlds together. In this way, shopping and budgeting apps could be delivered to the user in real time, such that a bank or financial advisor could enhance personal financial management by delivering budgeting information instantly as the client was shopping.

At the same time, analysis of individual, group and population movements and behaviors can yield interesting and powerful insights. At the individual level, biometric identification via the use of accelerometers is being investigated to determine whether a user's physical movements — their walking gait or the way they move their hands — could be used for identification and authentication.2 It may also be possible to obtain a comprehensive view of patterns of movement and behavior on the part of thousands of mobile phone users.3 Mining these data could provide a wide range of benefits for financial services institutions. For example, mass behavioral data could aid decisions on where to locate an investor center or to enhance insurance underwriting processes.

As part of our research, we had the opportunity to discuss these trends with Andy Lippman from the MIT Media Lab. He offers a way to think about the future of mobility in a recent report, where he suggests: "rather than using devices predominantly to bring the distant near (i.e., long distance phone calls and messaging), technology is poised to enhance the immediate experience of the world around us. The devices may well plateau in terms of processing power, and become instead a nexus for the communications and sensing that we carry with us."4 Ultimately, the way forward in the mobile world may require financial services institutions — and all of us along with them — to re-imagine what mobility means.

Please be sure to check out our reports once they become available later this month. We will also be hosting a Dbrief webcast on this topic on May 20, 2014 from 2 – 3 p.m. EDT, which you won't want to miss.

1 "Smartphones set to become even smarter," Thomas, Daniel, The Financial Times, Jan. 3, 2014. 
2 "Cell Phone Based Biometric Identification," Kwapisz, Jennifer R., Gary M. Weiss and Samuel A. Moore, Department of Computer & Information Science, Fordham University.
3 "A Survey of Mobile Phone Sensing," Lane, Nicholas A., Emiliano Miluzzo, Hong Lu, Daniel Peebles, Tanzeem Choudhury, and Andrew T. Campbell, IEEE Communications Magazine, September 2010.
4 "Proximal Radio:  The Return of Infrastructure-free Radio," Lippman, Andy, Senior Research Scientist, MIT Media Lab.

As used in this document, "Deloitte" means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

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