This week we’re celebrating 5 years of the Apple App store (see Wired’s commentary.) The realization that in 5 years mobile and apps have had such a huge impact on banking, can not be understated. Of course, there were many in the financial services space that were massively skeptical of the iPhone and Apps when they first launched in 2007. My favorite quotes come from a January 14th, 2007 article on Bloomberg, that contain the following gems:

“The iPhone will not substantially alter the fundamental structure and challenges of the mobile industry,” Charles Golvin, Forrester Research Inc

“Apple will sell a few to its fans, but the iPhone won’t make a long-term mark on the [financial services] industry“, Matthew Lynn, Bloomberg

Today it’s rare for me to meet someone who doesn’t understand the impact mobile is having on our industry, but back in 2009 when I started discussing the broad impact of mobile, the sceptics outnumbered the believers 10 to 1. Today, if you don’t believe in the power or impact of mobile you’re most likely a luddite. Incidentally, it even took Finextra 4 years before “Mobile Banking” was an available category for tagging blog posts.

But here’s the thing – the economics, fundamental service structure, customer experience requirements and core customer expectations in retail banking have flipped almost entirely in just 5 years – and almost no one, not even top industry analysts who watch this space every day, saw it coming.

Think about that. This rate and magnitude of change has NEVER happened in the banking industry ever before, not even close. So it is understandable that when presented with this new paradigm, that many dismissed it as unimportant for the mature, deeply regulated, incumbent-controlled industry we know as financial services.

What comes next?

While the emergence of person-to-person payments via the phone, instant balances on the handset, remote cheque (or check) deposit capture, even real-time receipts and feedback off of an NFC powered App are sexy, this is very early in the day for Mobile – we ain’t seen nothing yet.

The marriage of big data (curated to rich data), personalization, geo-fencing, wearable computing and other such iterations on mobility mean that the shift in day-to-day banking engagement, payments context and customer fullfilment when and where I need it – is just beginning.

The problem is that the organization charts of retail FIs are not built in anyway to respond to this shift. It’s why what we’ve seen today is little more than trying to fit internet banking on to a smaller screen, or shove a debit card into a mobile wallet. This is not mobility as we’re going to see it develop over the next 5-7 years.

For a start, mobile won’t look like the banking we know and love today based around branch engagement or the wet signature card of a typical onboarding process. Mobility will drive the contextualization of banking such that the promise of a bank in it’s ability to solve your financial problem or enable your life will be entirely different based on where you are, what you’re doing and what you need to help you get something done.

This distributed form of banking will largely relegate the branch to a quirky form of support structure for roaming customers performing banking everyday in their life. The ability to integrate these experiences into a customer’s life will be the only differentiation that matters in the next decade.

I know some are probably reading this right now with the same practiced skepticism – really, we’ve heard it all before, right…?

My guess is that those skeptics are the same ones that felt the same Charles Golvin or Matthew Lynn did when iPhone and the app store first appeared – “it’s not fundamentally going to change our business”.

They’ve been wrong before, they’ll be wrong this time too…