In June 2014, the US supreme court decided that police needs a judicial authorization to infiltrate a smartphone. In its explanatory statement, the judges noted that „modern cell phones […] are now such a pervasive and insistent part of daily life that the proverbial visitor from Mars might conclude they were an important feature of human anatomy.“ (https://www.law.cornell.edu/supremecourt/text/13-132) Therefore, hacking the smartphone would be such a deep violation of one’s human privacy that it requires authorization. This metaphor, namely of the smartphone as a part of human anatomy, has ramifications on smartphone banking, which shall be explained in the following.
The smartphone always at hand in our pockets – that’s how we walk around: from school kid to senior employee. The entire world in a handy gadget. Knowing-where-to-find-it is the new knowledge. A steady data stream connects the digital with the analogous and vice versa (our user-data). A steady stream where before hard borders between self and environment have been in place.
What effects does this recent development have not only on our health, but on our entire personality? As studies suggest, smartphones weaken focus and make us mentally lazy – after all, we need to use our brains less thanks to Siri’s talent to organize our calendar and get around in a new town (Cherry, 2018).
And yet, this is just the beginning. In evolution, touching and fondling are deeply routed means to amplify intimacy. Thus, haptic elements increase trust and willingness to take risk (Melumad und Pham, 2017). Already before language assistants were integrated into smartphones, we have been externalizing cognitive tasks to the gadget in our pockets (Chemero and Käufer, 2018).
Recently, philosophers apply the so-called extended-mind-hypothesis (after Clark and Chalmers, 1998) to describe the impact of high-tech on us (see for instance Record and Miller, tbd.). Even before (more precisely 91 years ago) german philosopher Martin Heidegger wrote on the readiness-to-hand (Zuhandenheit) of tools we use everyday. A sledge is „proximally and for the most part“ not opposed to its user. We have a much closer intimacy to it than to a „thing“. Only when the sledge doesn’t work the way we expect it to is it that we start getting interested in it as a thing and slice it into its characteristics (measure, weight, …) The more complex the „equipment“, the less we understand its mechanisms and characteristics. Still, we are no less satisfied so long as it fulfils its purpose. The sledge as an equipment is ready-to-hand, in that it is handy, the (malfunctioning) sledge as a thing is present-at-hand (vorhanden), viz. is opposed to us, and we contemplate and analyze it (Lynch, 2016).
This brings us back to the smartphone. The smartphone is handy, intuitively usable and usually functions without objection. Since the iPhone, the gadget is more ready-to-hand and less present-at-hand. Due to the haptic handling, we treat it much more naturally and intuitively than the computer. Thus, it took the role as the central interface between analogous and digital world. The easier and more flawless to use, the less we consciously notice the interface. This lets us enjoy the endless application it connects us with.
The smartphone is hence not just one technological gadget. Its influence on our personality and subjectivity also shapes the expectations we have on smartphone banking. First of all, banks should develop their apps not as a channel similar to E-Banking, but as a more intimate contact point with the customer. NeoBanks understand this and offer solely the app.
These new players are also the first to intensively utilize the vast amount of data that accrue in mobile banking. Further, they understand PSD2 and similar initiatives as opportunities, thus enabling the above-mentioned steady stream of data in both directions. This fluidity may also alter our relationship to money itself: Revolut, for instance, shows not only the balance, but also the flows – mounting with salary payments, ebbing away during the month. The exact amount becomes secondary. Self-defined budgetary rules defined in the app replace conscious control.
Smart banks will make use of the fact that haptic handling increases trust as well as willingness to take risk. The app should require little typing and more wiping, prodding and fondling. Biometric authentication should replace log-ins. All this helps establish a subtle proximity to a user group the customer consultant rarely gets to see.
The app has to function as easily and flawlessly as possible. And of course everything must be ready-to-hand immediately – thus the drive towards instant payments. High technological demands no doubt, but banks will have to satisfy them if they want to reach the smartphone-man. With a high usability, the bank can establish its app as a central interface to all financial activities of its customers. And there are so many possibilities to distinguish oneself from the competition: think of integrating language assistants, of chat-bots adapting the profile of the customer, of interfaces to depot and asset management and of gamification.
Mark Weiser, luminary of early Silicon Valley, wrote in his famous The Computer for the 21st century: „The most profound technologies are those that disappear. They weave themselves into the fabric of everyday life until they are indistinguishable from it.“ (Weiser, 1991) If we take this seriously, language assistants and virtual reality glasses are just logical next steps. Further down the road, we may have chips implanted under our fingers instead of smartphones. Successful banks will not be ignorant towards these developments, but view them as opportunities – for instance to increase intimacy with the customer while simultaneously reducing personal labor costs. Lastly, they must not forget what the supreme courts stipulation: the sensitive data on our smartphone must be as well protected as our very body parts.
Chemero, Anthony and Käufer, Stephan (2018): Pragmatism, Phenomenology, and Extended Cognition, in: Pragmatism and Embodies Cognitive Science, pp. 57-72, online at: https://books.google.ch/books?hl=en&lr=&id=sQpEDQAAQBAJ&oi=fnd&pg=PA57&dq=smartphone+extended+mind+hypothesis&ots=gkvcSfqHSm&sig=8Jp7eJMtkRskQvuBcmrs7vtCXUc&redir_esc=y#v=onepage&q&f=false
Cherry, Kendra (2018): The Effects of Smartphones on the Brain, online at: https://www.verywellmind.com/how-do-smartphones-affect-the-brain-2794892
Clark, Andy and Chalmers, David J. (1998): The Extended Mind, Analysis 58 (1), pp. 7-19, online at: https://philpapers.org/rec/CLATEM
Lynch, Michael Patrick (2016): Leave my iPhone alone: why our smartphones are extensions of ourselves, The Guardian 19.02.2016, online at: https://www.theguardian.com/technology/2016/feb/19/iphone-apple-privacy-smartphones-extension-of-ourselves
Melumad, Shiri and Pham, Michel (2017): Understanding the Psychology of Smartphone Usage: the Adult Pacifier Hypothesis, in NA – Advances in Consumer Research Volume 45, pp. 25-30, online at: http://www.acrwebsite.org/volumes/v45/acr_vol45_1024470.pdf
Record, Isaac and Miller, Boaz (tbd.) Taking iPhone Seriously: Epistemic Technologies and the Extended Mind, in: Extended Epistemology, online at: https://philpapers.org/rec/RECTIS
Weiser, Mark (1991): The Computer for the 21st century, Scientific American Ubicomp Paper, online at: https://www.ics.uci.edu/~corps/phaseii/Weiser-Computer21stCentury-SciAm.pdf
This blog war originally posted in German at: http://digital-finance-experts.blogspot.com/2019/02/extended-mind-und-smartphone-banking.html