CapitalOne announced a partnership today to integrate their credit cards into the ShopSavvy mobile wallet application. Like many financial institutions, CapitalOne is looking for ways to remain relevant to the consumer and is struggling to retain control over payment transactions. As digital wallet and coupon applications continue to gain mind-share among consumers, financial institutions risk disintermediation and partnerships like this are one way to maintain their positioning.
In order to maintain mind (and wallet) share, financial institutions will want to build solutions that provide an integrated experience from within their mobile banking application. Mobile consumers prefer an integrated, holistic experience for managing their financial transactions, rather than having to jump between multiple purpose specific applications. Because CapitalOne integrates their card into the ShopSavvy application, rather than providing a portal to the ShopSavvy capability emedded in the CapitalOne mobile app, they may not receive the intended benefits and risk their customers migrating more towards ShopSavvy and their other partners as a result of this partnership.
Moreover, CapitalOne is promoting this new capability via their website and driving customers to register their CapitalOne credit card with ShopSavvy via an online site. While a holistic user experience across channels is important, it will also be necessary for CapitalOne to promote this capability and enable sign-ups from within their existing retail banking and credit card applications. This once again demonstrates the need to build mobile applications which are extensible, and allow the FI the ability to integrate new capabilities rather than being dependent upon their mobile banking software vendor.
While first generation mobile banking solutions were able to rely on vendors to provide standard functionality, up to and including mobile remote deposit capture, the demands of more educated customers couple with the increasing importance of digital wallet and payments, will require control to shift from the vendor back to the financial institution. A packaged solution may still be able to serve their needs, so long as that solution is extensible to support the institution’s unique mobile strategy and roadmap, and the necessitated rapid rate of change.
