Intelligent Environments has metamorphosed from being a small-scale bank support services provider to a multi-disciplined digital and mobile banking platform that serves four of the five largest banks in Britain and has gained a foothold in the lucrative banking app arena, Maryrose Fison reports.
To say that Intelligent Environments (IE) has expanded its product offering over the past 25 years would be an understatement. The London-based digital banking solutions provider was founded in 1986, and merged with business process outsource provider Documetric last year to become part of the AIM-listed Parteq Group. It has grown its client proposition, moving from primarily supporting bank integration projects to launching and running a digital banking system and mobile banking platform and gaining traction in the rapidly growing app market.
“We aim to enable customers to simply and conveniently manage their money while making sure that we balance the needs of the consumer with those of the bank,” says Philip Blundell, chief executive officer of IE.
Providing a digital banking system
Over the past five years, it has generated in the region of £20m ($32m) in revenues, with the lion’s share deriving from NetFinance, the company’s digital banking system which went live in 2005.
Blundell explains that the system provides instant online applications for financial products, online account management for customers and integration of the online channel with existing business processes such as call centre support, work flow and case management.
As a mark of IE’s confidence in its own products, it promises clients the platform will be fully integrated and live within 90 days and has gone so far as to quantify exact figures for the amount of revenue financial institutions could gain from using the product.
It calculates that online applications can reduce bank acquisition costs by up to £4.90 ($8) per application and online account management can generate savings of a minimum of £7.50 ($12) per online customer. Usable product design can increase the number of completed online applications by 40% and improved data validation and user-friendly processes are viewed as increasing the number of applications that are accepted first time by 20%. With a weight of evidence to demonstrate its value, it is little wonder that high street banks have signed up to the new system.
“We have 14 bank customers including Lloyds and Barclaycard. Some host the platform themselves so we are not aware of the total number of users, but we are aware of nearly am online users,” says Blundell.
As well as supporting loans, savings and investment products, the platform also supports credit cards and commercial cards. The system provides an online system for credit card issuers that allows customers to apply for a new card online and then use the internet to manage their account.
Moving with the times
Last year Blundell’s team took digital innovation one step further with the launch of Mobinetic, a mobile banking platform that allows users to check balances, pay bills and transfer funds using a mobile phone.
It has proved a shrewd move with banks all over the world, from Mexico’s Banamex to Finland’s Op Pohjola, announcing plans to launch mobile services for retail customers.
“The benefits to banks will include increased marketing effectiveness through improved cross-selling and the ability to attract new segments of customers; reduced operational costs through lower transaction fees, channel migration and fraud reduction and increased brand awareness,” says Blundell.
In 12 months of development the mobile platform swallowed more than its allotted £1m annual research and development budget, but it represents a potentially significant growth area. “The platform has cost over 1m and a further investment is envisaged over the next three years,” says Blundell. “But it is a subscription service and multi-year contract which gives us a controlled and predictable recurring revenue stream.”
Feeding mobile appetites
As mobile banking solutions become less of a novelty and more of a must-have for banks, the company has extended its mobile banking solutions proposition with the well-timed launch of two mobile phone apps.
In November, IE launched its Barclaycard app, which allows iPhone users to check their balance, view transactions and pay bills from a mobile phone. It has also launched a Generali app – a savings and investments app – which allows customers to check the value of their investment plans.
According to IE’s research, 300m apps were downloaded by mobile phone users in 2009, and in 2010 the number rose to 5bn. This year it is likely to exceed 17bn.
Blundell has well-founded opinions on the likely growth of this sector for the mobile financial services market. “Apps are crucial to many retail financial institutions today to provide a differentiated and compelling service to a highly fickle customer base,” he says.
And while mobile banking has been slow to take off in the UK, he believes successes in markets in Asia and the US are paving the way for more growth in mobile banking here. IE has compiled research which shows that mobile banking can increase client retention by 20%, increase customers with 1-2% of new customer acquisitions being driven by mobile offerings and cause a 70% reduction in call centre volumes.
“UK banks are now starting to wake up to the benefits this channel brings. Barclays has seen dormant accounts reactivated and HSBC now states that this will be ‘the’ channel going forward,” he says.
But with a stellar year behind him, Blundell isn’t about to let the company make the easy mistake of sliding onto the back burner. He has high aspirations for the year ahead. “Over the coming 12 months, we want to continue to drive revenue through direct relationships, further exploit our rapidly growing strategic alliances channel and move into new markets,” he says.
If last year’s performance is anything to go by, IE is on a trajectory to fulfil many more targets in the coming months.