Banking Review

iPad or iFad?

Apple iPad sales may be astronomical; however, the gadget’s computing
ability and security limitations bring it crashing back to earth…

BY SHU FHANG SOH

Apple is reported to have sold 30,000 iPads on its first day of release in Australia, but do we really need another device alongside desktops, laptops and smartphones?

One reason may be that while equipped with limited computing ability, iPads facilitate regular Internet usage (including online banking) better than smartphones, allowing us to lead our iLife 24/7.

Extending to financial services
Some technology commentators believe that the introduction of the iPad is likely to drive greater uptake of mobile banking or “banking on the go”.

Institutions such as Chase US, ING Direct Canada and St. George Bank locally have already created iPad banking applications, allowing customers to manage their money anytime and anywhere. Through these banking applications, customers can view their account balances, review transactions, transfer funds, read product information and locate ATMs.

Turkish lender Akbank has extended the iPad banking functionality further by launching what it calls an iPad branch, allowing users to conduct more transactions including stock trades, investment fund transactions, bond sales and purchases, and GSM (phone) credit purchases.

One drawback though, is the iPad’s lack of security features, which are essential for today’s banking transactions.

Transactional abilities aside, perhaps iPads are better used to enhance the customer experience and build the brand. For example, Webex offers a free application that allows multiple participants to engage in online meetings from their iPads. This could be adapted to financial services where customers could chat while on the move with their local branch managers via iPads. The iPad could also be used to replace monitors in newly refurbished branches to foster closer customer contact.

On more sophisticated financial issues, the SmarTrend’s iPad app contains enhanced charting and web features to analyse 5,000 US equities in real-time, helping customers to monitor their portfolio better.

Financial planners can use this to demonstrate portfolio analysis for their customers more interactively, or simulate financial position scenarios.

In the US, the credit union industry uses a shared branch locator app to help customers locate 6,300 branches via iPads.
Financial marketers can create meaningful customer experiences by providing practical information such as multimedia-rich digital magazines/booklets (rather than pdf) to help customers to better manage their finances. With iPad, documents or images can be shared at greater ease and speed and it becomes another way of brand building.

So numerous things could be done with tablet PCs, limited only by our imagination.

Sales of the iPad reached 3 million in 80 days in a handful of countries where it is being sold. Deutsche Bank recently raised its estimate of iPad sales from five million units to 12 million units in 2010.

But it seems that some local consumers have already regretted their purchases, feeling the device is more of an iFad. Several factors are at play that may limit iPad’s feasibility for mobile banking. Firstly, iPad does not have full computing ability and security. Consumers from certain age groups are more inclined than others to do banking on iPads, constraining widespread uptake. Worse still, consumers may use the iPad for everything but banking!

Those financial services companies without an iPad application or iPad friendly website may be tossing up if they need to join this bandwagon. With more pressing technology concerns, such as enhancing the mainstream online banking experience, iPad would be the last thing some are thinking about. Just having iPad apps may not equate to great customer experience – which is what financial services is all about. Cool gadgets don’t replace the basic principle of good customer service and products. Great customer service delivery across all channels remains the key and iPad is merely a platform to deliver this enhanced experience.

So regardless of its longevity, the iPad’s strong early adoption reinforces that people are becoming more accustomed to multimedia experiences _ watching video, reading news articles, banking and tweeting _ all from one gadget. It is also clear how mobile and wired we are becoming. Perhaps it is not so much the iPad that we need to take note of, but the change in consumer trends overall.

Shu Fhang Soh is a Senior Industry Analyst with Abacus _ Australian Mutuals Limited.