Innovation in Spain: A Way Forward for Banks Globally?

Innovation in Spain: A Way Forward for Banks Globally?
Innovation is global. This isn’t too revolutionary of an idea, neither is it new nor original. Yet, increasingly, conversations with banks, especially in the US, reveal that many institutions aren’t looking too far outside of their market, let alone their vertical, industry, or country, for inspiration on how to innovate. In effect, this is giving an outsized impression by bankers of innovation in banking. The figure below, taken from a Celent financial services firm survey, and featured in the report Innovation in Financial Services Firms: The Leadership Gap, highlights the disconnect. It might seem intuitive at first glance—51% of respondents think their bank is worse at innovating than other industries. No surprises there. Digging into the other half, however, reveals that a startling 42% of survey respondents think that financial institutions are on par, better, or much better (!) than other industries. It begins to look a lot like Stockholm syndrome, where a hostage is kept for so long in a state of captivity that they begin to empathize and feel positivity toward their captors.

How well do financial institutions innovate compared with other industries?

Source: Celent The disruption of traditional financial services is very much a global phenomenon, with financial services tech startups filling the gaps where traditional services have lagged behind evolving consumer demand. Moving in step with innovation is a shift in the way in which banks can foster innovation. There are plenty of examples globally. In Spain, innovation is coming from some of the largest banks themselves. La Caixa recently set out to make Barcelona the first ‘contactless city,’ improving in-store and ATM experiences through a new contactless payment system. BBVA launched innovative customer assistance platforms like a video-conferencing service that allows users to connect to branch personnel for specialized help, the intelligent assistant called Lola, and the Contigo initiative which gives users unprecedented control over contacting personal advisors. Banco Sabadell launched mobile cash withdrawal through “Instant Money,” and one of the first Google Glass banking apps globally. Spain, however, is an anomaly in the financial industry, and while financial institutions in countries like the US have attempted to innovate, success has varied. One bank, BBVA, has been a leader in innovation, broadening the way in which new technology and value is discovered, fostered, and funded. Consider the following ways BBVA approaches innovation:
  • BBVA Innovation Center: Headquartered locally in Madrid, the BBVA Innovation Center is where many of the innovative ideas and designs are cultivated. Acting as an incubator for creativity, the bank is able to internally design and test prototypes for new ideas. Products like Tu Cuentas, BBVA Contigo, and ABIL ATMs have come out of the work done there.
  • Acquisition: BBVA, in the highly publicized acquisition of the US-based neo-bank, Simple, has ventured into new territory by leveraging acquisition to adopt innovation. It remains to be seen how the two businesses come together, and what role Simple will play in the larger BBVA vision, but the deal offers an example for other banks to follow. As institutions start to look more like software companies, they will begin to do what businesses in industries like tech and pharmaceuticals have been doing for a long time: letting others innovate, and then acquiring them.
  • Venture capital:  Innovation needs resources, and with BBVA Ventures, the bank has taken the step to partner and invest with entrepreneurs to help ideas grow and become successful. BBVA Ventures has already invested in companies like FreeMonee, SumUp, and Radius, and last year announced $100 million for investment into new projects.
BBVA is a mixed bag of approaches to innovation, but perhaps the most telling theme is the way in which it has viewed fintech startups as partners or investments, rather than future business threats. Look forward to the upcoming Celent report, Innovation in Spain: Profiles of Spanish Financial Services Tech Startups, where the state of innovation is examined by looking at some of the most interesting new startup companies. Innovation doesn’t exist in a vacuum, and gaps in financial services are often global phenomena. Taking a US-specific view of innovation limits the potential for finding the next great idea, and institutions should broaden their horizon.

Facebook Banking: Don’t Bank on it

Facebook Banking: Don’t Bank on it
On May 5th 2014, La Caixa, one of Spain’s largest financial institutions, officially announced the launch of a Facebook app that provides users access to online banking features through the Facebook platform. It’s just the second bank in North America and Europe to launch a Facebook banking app, and, as far as Celent is aware, the seventh globally. In the weeks following the announcement, I was able to speak with a few different banks about the news, and surprisingly, while they were aware that Facebook banking existed, most were unaware how many banks around the world supported it. This couldn’t come at a better time, as Celent’s recent report, Banking on Facebook: An Overview of Banks with Transactional Facebook Apps, provides detail and analysis of the current offerings, highlighting interesting use cases and opining on the broader applicability of Facebook banking apps in financial services. Efforts are in the early stages, and even the most mature Facebook banking applications have not come close to replicating what’s possible through mobile apps. But are customer customers ready to adopt Facebook as a channel? Not really. In the figure below, taken from a Celent consumer survey last year, only 1% of respondents favored Facebook and Twitter as methods for engaging with their financial institution. In 2012, Citibank asked users about Facebook banking. The response was a resounding ‘NO.’ Users made it clear that they were not ready, echoing long-held sentiments about the perceptions of social media, and illuminating the challenge banks face in developing the channel. Consumers Preferences For Engagement Do Not Include Social Media Untitled Source: Celent US/ Canada Consumer Survey, July 2013/ November 2013; If you had an important topic you would like to discuss with a banker, how would you prefer to do so? N=1028 Celent believes that Facebook banking is only going to be the right choice for a very small group of institutions, given the following:
  • Banks don’t have unlimited resources to dedicate to throwing things against the wall in order to see what sticks
  • Most banks have a long way to go in other channels
  • Social media popularity is a guessing game
  • Despite the popularity of social media, consumers and banks are still uneasy about conducting transactions over social channels
This isn’t an indictment against innovation in social media. Social media is becoming a bigger part of financial services, and many, including Facebook themselves, are investing in social transactions. Social media and banking have a bright future together, however many in the industry are having a hard enough time developing functionally rich and well-designed mobile or tablet apps. Institutions should prioritize those investments for the time being. Banks like ASB Bank, DenizBank, FNB Bank, GTBank, ICICI Bank, La Caixa, and Tangerine (ING Direct Canada) have made Facebook banking applications an integral part of a broader social media strategy. FIs will gain the most value not by mirroring these applications, but by looking at what these institutions have done through social media. Celent found that banks supporting Facebook banking tend to have robust and highly innovative social media strategies. ASB Bank hosts a virtual branch through Facebook, GTBank allows for ‘instant account opening,’ and FNB Bank has created a social media persona that unifies the customer experience across all social platforms. The convergence of social media and banking marches on, despite the uphill battle that many institutions face validating some of the concerns consumers have, and the inherent challenges of each platform. Facebook banking isn’t going to work for all (probably most, at least for now), but lessons can be learned from the ways in which these banks have crafted solid social media strategies. Institutions looking for social inspiration need only visit their pages.

What Does the BBVA Acquisition Mean for Simple?

What Does the BBVA Acquisition Mean for Simple?
The financial world is abuzz about the recent acquisition of Simple by the Spanish banking giant BBVA.  The news is surprising, but not unusual for a banking group that has invested in other innovative companies such as Freemonee, SumUp, and Radius.  The deal also legitimizes a financial start-up that has garnered quite a bit of skepticism among some in the industry, despite a small yet dedicated and growing customer base.  Banks are clearly considering these innovators to be significant enough to validate their acquisition.  Simple is a brand, not simply a product offering. It has recognition outside of the industry, and the effect on existing customers makes this acquisition different from the norm. As the relationship unfolds, it will be interesting to see how Simple responds to the following:
  • Will Simple really remain independent? The statements released by both parties claim it will. Recent acquisitions of Nest by Google and WhatsApp by Facebook also made similar claims of maintaining autonomy, but that doesn’t mean it will remain the case.  Yahoo acquired Flickr in 2005 with similar promises of independence, yet in the subsequent years drove an up-and-coming innovator straight into the ground.  The fear for Simple customers is that the unbeatable user experience and exceptional customer service that made it so appealing will slowly be lost as the two companies integrate. Accounts will remain at Bancorp bank for the time being, but the inevitable move to BBVA must be graceful, or a once innovative product is liable to lose the only edge it had in the market
  • Does this deal allow Simple to become more complex?  The big attraction of this deal for Simple is that it gives them access to the resource of BBVA, a massive multinational financial institution with a clear penchant for funding innovation.  The main complaint with the start-up since launch was the limitations that came with not actually being a bank.  Simple didn’t do mortgages, it didn’t do investments, and there were no credit cards.  For the PFM features to be truly useful, users would have to go ‘all in’ with Simple.  More resources could allow for more development into a more diverse set of products and financial offerings, increasing the potential of the already well designed PFM platform.  The test will be the following: will Simple be allowed to continue its own brand with its own products, or will it simply become (pun intended) a funnel to push BBVA’s core business?
The acquisition of Simple, no matter what happens, is a good sign for financial start-ups, especially those that compete directly on Banks’ turf.    The industry could learn from the way BBVA has taken a page from tech giants and big pharma. There are hundreds of innovative Fintech companies out there, and great ideas don’t always have to come from internal development—in fact for large banks they rarely do. But Simple has now become part of the traditional banking world they used to decry.  Will the financial services industry’s challenging record of financial innovation rub off, or will the resources of a megabank allow Simple to grow into a true disruptor?  Only time will tell.

Finovate Europe 2014: Some Key Takeaways

Finovate Europe 2014: Some Key Takeaways
Finovate just ended yesterday, and it was great to see all the new and interesting ideas floating around the financial services space.  For those who may not know, Finovate is a two-day event that showcases some of the best new and innovative things happening in financial services technology.  Over 60 companies coming from all over the world  presented this year, taking part in the rapid format that gives each presenter 7 minutes to show why their product is worth the viewers’ attention.  The event can also be a great networking opportunity, as many of the attendees are from large institutions or influential VCs.

Figure 1: Number of Presenter Products with Aspects of Each Category

 Untitled Here are some key takeaways after watching most of the presentations:
  • PFM is still going strong:  Banks have been declaring the end of PFM for years now, yet the topic is still one of the most talked about at every Finovate.  At Finovate Europe, PFM was the most prevalent.  What does this mean for the institutions?  Well, first off, it’s obvious that entrepreneurs still see the value in PFM tools.  Banks, many of which adopted PFM solutions long ago, have shrugged at the lackluster adoption, subsequently declaring PFM a failed experiment.  Financial institutions themselves are partly to blame, hiding these platforms in menus, barely showing any desire to market the products. Yet the biggest problem with PFM is shared by all, vendors and banks alike.  PFM doesn’t add value!  Let’s just assume most people want to know how much they spend on coffee each month (I don’t!). What comes next?  Where’s the action?  The fundamental problem with PFM is that the way the data has been leveraged to truly provide value has been disappointing at best.  Until the quality of the data is there, PFM won’t be in the mainstream.  A secondary concern—the misconception that most vendors buy into—is that PFM can be fun, succeeding through cleverly designed games and well-designed UIs.  I hate to say it, but PFM will never be fun! Nevertheless, there were some interesting takes on PFM this year that could offer some new ways to think about it going forward. A company called Tink takes financial data and creates insights for the user like where you spent the most money in the last year, largest one-time purchase, most frequent spending location, and others.  The difference is that these are non-intrusive ‘stats’ that show up only if a user scrolls down from the landing page on the mobile app.  Three takeaways from Tink’s product: everything is done on the bank side, it’s is more interesting than visualizations of spending categories, and the analysis requires nothing from user.  Meniga, a PFM success story in Europe, uses demographic data to help small businesses find market opportunities. It provides competitors’ sales data, locations, profitability, among other things.  It’s not PFM is the strictest sense, but that’s probably a good thing.  PFM needs a little shaking up
  • Moving Mobile Banking Beyond Transactions:  While not a new topic, this was a common theme across a variety of presentations.  The most common involved using the camera to assist in account opening or paying bills (see Kofax, Top Image Systems, and Axa Banque).  Mitek and US Bank have been at this for some time, but the rush of new start-ups looking to fill the gap in the market is telling.  As mobile banking becomes more common, and adoption increases, consumers’ appetite for mobile-based interactions will broaden.  Banks are not only beginning to offer consumers the ability to do more complex transactions via the mobile device, but they’re opening up ways for financial institutions to monetize the channel.  This will effectively make ROI much more tangible, doing away with the misconception that the value of digital channels is ambiguous
  • Replace the Password: Is the password dead? That was the question asked by Wired Magazine in November of 2012, and something that has been on the mind of Celent for quite some time. Finovate produced no shortage of companies looking to innovate on financial security.  Finovate veterans, Behaviosec, continue pushing their gesture-based biometric product that learns how the user moves and interacts with the device to create a confidence score for use behind the scenes.  Encap uses the mobile phone as an authentication device for approving transactions or logging into digital banking.  This was the second most discussed topic at Finovate.  While biometrics is already used in some places globally, the practicality of such solutions is dubious at best.  Security needs to start becoming a little more practical.  One of my favourite presentations was from Feedzai, where they use social media data scraping to assess fraud risk.  For example, if I just checked in at a restaurant in San Francisco, then it’s likely that a transaction from somewhere else is fraudulent.  A few took to twitter to question whether customers would be ok granting banks access to their social media lives.  If Citibank starts poking people, then maybe I could see the point, otherwise, it’s a practical application for enhancing security.  Besides, most social media information is already public anyway
  • Lots of Front-end, Little Back-end:  One thing Finovate teaches us all is that there is no shortage of great UI designers.  One thing Finovate doesn’t teach us is that banking is messy once you start connecting that nice-looking front-end to the messy back-end.  Are most of these front-end products from Finovate really bank-ready? I’m not convinced.  Large vendors like Misys, Fiserv, and Temenos may not have won best in show, but with integrated backend products, they’re in a much better position to succeed. One of my favorites was Five Degrees, a Dutch back/mid-office solution that runs in the cloud and offers a truly innovative BPM product.  Other than that, good examples of back-end innovation were scant
  • Social Collaboration:  It was interesting to see different idea behind leveraging crowd-sourcing and social collaboration.  Nous presented a product for investments that incentivizes users to play a game that aggregates data based on the players’ outcomes.  A company called MyWishBoard uses collaboration, similar to SmartyPig, for goals and wishlists list that can be shared via social media with friends.  Leveraging the power of crowds has been difficult to accomplish in financial services, and most social strategies have revolved around marketing and customer support. While some of these ideas may not be the best business ideas, it’s nice to see different takes on leveraging the power of social
  • No Branch Channel Innovation: Absent from the Finovate line-up were any innovative ideas around branch technology.  Celent has written a number of reports looking at branch technology, and there is undoubtedly still much to talk about in this space.  The closest the show came was with JHA’s Luminous, a Dropbox-like secure storage cloud application for bank documents.  Branches are changing, but they aren’t going away, at least not anytime soon.  Banks have been doing some interesting things in the branch channel, but there are still plenty of innovative ways to maximize the brick-and-mortar experience. Celent did a recent consumer survey showing that branch channel adoption is still very high among consumers, and the first choice for important decisions. Considering the adoption gap between PFM and the branch, the low activity is surprising
 

Does native advertising have any future in mobile banking?

Does native advertising have any future in mobile banking?
A new trend in the digital publishing world is a shift toward ‘native advertising.’  Advertisers are beginning to make ads more subtle, blending them into the actual content of the website.  The ads are presented in a way that flows seamlessly with the voice and style their environment.  Sites like Facebook, Twitter, Google, and others have been doing this for a while, but only recently has editorial media adopted the style.  Some predict native ads will dominate digital channels across all industries in 2014. See below for examples from Twitter and Facebook.

Native ads in mobile emphasize minimal disruption in UX

   Pic Pic1
Source: Facebook iPhone App; Twitter
Unsurprisingly, banner ads have proven to be increasingly ineffective.  The unnatural placement of banner ads makes them all too easy to block or simply ignore, and the flashing lights, noises, ridiculous promises, or distracting mini-games can be extremely annoying.  In mobile apps, where real estate is more limited, native advertising has allowed for a much more natural flow for the marketing (as shown in the figure above), and the effectiveness has been impressive.  A study by IPG Media Labs showed that users looked at native ads 53% more than display ads.  They also were 32% more likely to recommend the product to a friend. Banks can learn important lessons from the way native ads effectively gain the attention of the user while still respecting user experience, especially in mobile app design.  Financial institutions are understandably wary about trying to push anything through mobile that might be considered an annoyance.  Adopting some of the principles of native marketing and integrating them into a cross-selling strategy may be a much more effective route to take. A couple of key takeaways:
  • Native ads don’t disrupt user experience: The key principle of a native approach to advertising is a seamless integration of the advertisement into the user experience.
  • Marketing can be well designed to fit into existing interfaces: Evernote (seen in the figure below) uses this principle to show that a properly design user interface can make ads appear very natural.

Evernote’s UI Allows for Ads While not Sacrificing UX

 pic2
Source: Evernote iPhone App
To drive adoption, banks have often been hesitant to heavily push marketing, fearing the disruption in user experience.  User experience is clearly one of the most important aspects of digital channels, but applying some principles of native advertising could enhance sales effectiveness.   Could this be the logical next step for banks with strong mobile adoption and a proven digital strategy?

The demise of Blockbuster and the rise of the new independent video rental store

The demise of Blockbuster and the rise of the new independent video rental store
Earlier this year, Celent released a report, Branch Boom Gone Bust: Predicting a Steep Decline in US Branch Density, which made comparisons between the decline of brick-and-mortar video rental stores, like Blockbuster, and branch banking in the US.  Celent argued that the decline of Blockbuster at the hands of digital alternatives is a cautionary tale for banks that still value a traditional branch network. As I’m sure no surprise to most, Blockbuster recently announced that they would be shutting down all remaining retail locations—around 300—effectively ending operations.
“This is not an easy decision, yet consumer demand is clearly moving to digital distribution of video entertainment,” said Joseph P. Clayton, DISH president and chief executive officer. “Despite our closing of the physical distribution elements of the business, we continue to see value in the Blockbuster brand, and we expect to leverage that brand as we continue to expand our digital offerings.”
From the chart below, taken from the above Celent report, its clear that this has been in store for a while.

Blockbuster

Yet as countless blogs and news articles praise or nostalgically lament the once-great video giant’s downfall, an old question is being explored once again: what will happen to the independent video rental store?  Put simply, they’re evolving. Faced with years of low business and an ever shrinking cult customer-base, many small video retailers are innovating in an attempt to draw business back into stores, adding value in areas un-served by Netflix or Redbox. From the an article by Indiewire.com:
“Videology in Brooklyn put a bar in front and a big video screen in back, where customers can sit at tables and drink while watching free screenings. It doesn’t even look like a rental outlet anymore — it moved all the discs aside from the new releases off the floor and put in computer kiosks for customers to browse the inventory. Vidiots in Santa Monica, supported by its community and patrons from the Hollywood film community, raised money to open a screening room and a non-profit foundation that holds workshops, classes, and outreach programs. It’s redefining its sense of purpose.”
Is this an example for banks?  Sure it is.  Similar to what’s happening in retail, banks can add value to a branch-based experience. Consider this line from the above quote: “[The video store] doesn’t even look like a rental outlet anymore.”  Small video retailers are refreshing the idea of what a video store is, and what it could be.  Smaller banks like Umpqua Bank have already explored this idea years ago, and even megabanks like Wells Fargo are exploring the possibility of compact “boutique” branches. The rise of digital The other day I came across a cool chart from Horace Dediu that does a good job at visualizing the change in consumer behavior that drove Blockbuster underwater, and is driving younger generations toward less branch engagement.  A larger version can be found here.   The adoption of smartphones and tablets, even in relation to internet and mobile phones, sit in stark contrast to the group.  The second part of the graph shows the duration of growth from 10% adoption to 90% adoption in years. For smartphones and tablets (estimated), these numbers are in the single digits. The result is a substantial decrease in the development life-cycle of innovation, early adoption, and late adoption. For branches, this means a dramatic and rapid shift in the way consumers interact with their financial institutions. Blockbuster trailed both Netflix and Redbox by almost five years before releasing competing products.  The company not only failed to react to shifting demand, they arguably contributed to it. The founder of Netflix started the company after he paid $40 for a late video rental.  Blockbuster continued to remain unmoved by customer complaints over late fees, eventually settling a series of lawsuits over the matter.  Customers in turn, looked to innovative start-ups (i.e. Redbox and Netflix) to fill the void.  Blockbuster failed to adapt. The path forward is a mix of early adoption and, like independent video stores, a rethink of traditional business practices.  Let’s be clear, branches won’t die, but it’s difficult to make the case that significant redesign won’t happen. Will banking bloggers someday down the road, sitting in an independent video rental coffee shop, write about the nostalgia of traditional branch banking?  Probably.

The State of BPO

The State of BPO
It wasn’t too long ago that BPO was a simple exercise across a few very specific back-office processes.  Labor arbitrage was the meat of any BPO contract.  Celent’s upcoming report, BPO/ITO Provides in Banking: An Evolving Landscape of Service Complexity, shows that while this still holds true in many ways, the look and feel of BPO/ITO is changing.  FTE-based deals are still the predominant form of outsourcing contracts, but what’s becoming abundantly clear is that the top global vendors are expanding capabilities and drastically enhancing their value proposition. One element of this change has been driven partly by demand.  Earlier this year, RBC issued an apology to employees affected by a recent outsourcing deal.  American Express and Bank of America have begun moving some of their previously outsourced work back to the US, amid growing overseas labor cost and increasingly staunch public opposition to offshoring.  Large global vendors have moved to accommodate, serving many institutions through an onshore or nearshore model. Where providers have shown the largest strides is in the ability to leverage a broad set of capabilities to generate revenue and partner for transformational projects. Banks are increasingly relying on vendors and third parties for a broad range of services—more than ever before.  Most of the providers in this report have a long history of developing new products and services, mostly with the aim of servicing a broader range of processes.  Vendors want to prove to banks that they are process innovators.  Banks want to optimize efficiency. Put together, a move toward IT-reliant innovation and onshore capabilities has changed the face of outsourcing as it has long since existed. Celent continues to see a growth in partnership, leading to a number of modern provider engagements that work around some of barriers to traditional outsourcing.  Vendors know that not all operations can be outsourced successfully.  Moreover, compliance issues, reticence on the management level, and/or risk appetite might effectively limit an institutions desire to take advantage of these services.  Major global vendors have been building out Business Transformation Outsourcing (BTO) capabilities as way to service clients by acting as a transformation partner instead of a pure servicer.  In this instance, the business unit will remain with the bank, while the provider acts as consultant, IT provider, and transformation partner. A recent Celent report tackles this subject further: http://www.celent.com/reports/no-bank-island Other deals have highlighted the importance of technology, especially Business Process as a Service (BPaaS).  The new darling of the vendor community, BPaaS combines the benefits of cloud computing and business process services into an (typically) automated and multitenant solution that allows for flexibility, scalability, and a consumption-based model.  For highly variable processes, such as mortgages and consumer loans, flexibility is what makes this delivery model enticing. BPO vendors have become a lot better at what they do, and this is evident in the capabilities of the top players.  End-to-end is the new mantra by which vendors are selling their services, and no vendor in this report would discount the importance of strong IT capabilities. These are only a couple of the many trends currently affecting the market. Celent’s upcoming report on BPO/ITO is an effort to take a closer look at providers and how they have responded to these market dynamics and prevailing industry trends.  BPO service providers will be ranked using Celent’s ABCD analysis, and the report will outline an extensive list of process capabilities by vendor support.  Look for the report in Celent’s library soon!

Upcoming Tablet Report: Initial Thoughts

Upcoming Tablet Report: Initial Thoughts
Since May 2012, Celent has been releasing biannual evaluations of the mobile banking applications at the top 13 banks in the US.  Coming soon, Celent will begin a new series looking at tablet banking applications from the same group. Over the course of only a few years, tablets have gone from a relatively new and untapped avenue for customer engagement to the hot topic eagerly discussed by industry personnel.  Celent has had numerous conversations with clients and banks around digital channels, and some distinct patterns have emerged that deserve highlighting. First, most of the industry remains unclear about where tablets are placed when looking at digital channels.  Are they part of online banking?  Are they part of mobile?  In reality, tablet is tablet. Tablets take the best of the PC and the best of mobile and combine them into a device that offers functionality, portability, and a rich user experience.    Use cases also have to be taken into consideration when delineating between devices.  Online banking is functional, complex, and a daytime/ work activity, while mobile is quick, contextual, and on-the-go.  Tablets, in contrast, are often leisure devices, catering to casual couch browsing and intermittent time killing.  It’s a combination of how the device is used along with the rich interactivity that makes tablet optimization a critical component of any channel strategy going forward.  Still, banks wrestle with the reality of device proliferation.  Committing to digital channels can be costly, can take time, and often presents a fuzzy return on investment.  It’s no surprise that so few banks have taken the plunge. Second observation: tablet banking apps are by no means standard.  As our upcoming report shows, only 7 of the top 13 US banks have live iOS tablet apps, while only 2 have live Android apps.  What’s even more curious is that the statistics on market share run in direct contrast to how banks have developed.  Looking at the table below, with data from a survey done by Strategy Analytics, Android represents a staggering 67% of the market with 34.6 million units shipped.  Meanwhile iOS is declining.  Solely based on users, Android apps should be more prevalent.
Table 1: Global Total Tablet Shipments by Operating System
Operating System Q2 2012 Q2 2013
Apple iOS 17.0 14.6
Android 18.5 34.6
Windows 0.2 2.3
Blackberry 0.0 0.1
Others 0.3 0.0
Total 36.1 51.7
Source: Strategy Analytics
Banks need to be looking at digital channels holistically, whereby ‘digital’ is combination of the multichannel experience.  Tablets are a distinct aspect of that approach, and sales are growing at a tremendous rate. Financial institutions can no longer sit on the sidelines and watch as the landscape develops around them. Celent does, however, expect tablet banking to be a relatively slow mover, especially as banks still grapple with the movement and rapid adoption of mobile. Look for Celent’s upcoming tablet report looking at tablet banking offerings at the top 13 US banks and a similar report evaluating the top Canadian banks.