Game-changing innovation is around the corner

And in the beginning, size did not matter, but we were a fickle bunch and our eyes strayed. Smaller became beautiful. Then we wanted cameras, email and games, and devices started to grow again. As screens got bigger, businesses started to think about mobile banking – imagine trying to do that on an old Nokia with a one inch screen.

And now our phone is our constant companion – helping us in many areas of our life and business. So what is next in terms of technology and applications, and how will this impact the financial services industry?

While the first few weeks of January have seen large falls in the stock markets, think back 10 years: Blackberry had a market capitalisation of more than $50bn (£35bn) and Nokia, as a whole, was valued at $150bn.

Skip forward to the present and Blackberry (which has just – at best – 1 per cent of the current handset market) has waved a white flag and launched an android phone, and the glory days of global domination by Nokia (now gobbled up by Microsoft) are fading fast. Both brands are now almost bywords for nostalgia. Blackberry still tries to cling on to the fact that it is the most secure device, and regularly promotes pictures of political leaders such as Angela Merkel and Barack Obama using them. But the days when it was the de facto device of the financial industry are long gone.

What happened? The iPhone. Mike Lazaridis, who was then co-chief execuive officer of Research in Motion, was asked in 2007 about the threat from Apple’s phone. His reaction was: “How much presence does Apple have in business? It’s vanishingly small,” and he was dismissive of the idea that anyone would want a phone without a keyboard. That just shows how wrong you can be.

Today, the mobile phone giants are Apple and Samsung. But will their reign be any longer than the previous champions? It is worth noting that in 2014, the fastest sales growth was for Windows phones.

From its acquisitions, it is clear that Microsoft is focusing on the telecoms market – their stable now includes Skype as well as Nokia – and they are in the position to challenge in both the fixed and mobile arenas. Samsung also occupies some of that space, but it is an area that Apple is weak in. Could this be a chink in its armour?

Do not expect huge leaps any time soon – look at the low battery life of the Apple Watch Dave Millett

Each player has its own battalion of boffins searching for the next game-changing innovation. But what will that be?

We have all heard of there being complaints of recent iPhone models bending in pockets, while being carried around, but what if that was turned into a positive? Would you be interested in a device that you could roll up? Apple has already filed patents. It is great for doing business on the move and, with the end of EU roaming costs in 2017, it is a potential boon for anyone working across the continent, although if the UK leaves the EU that might remove that option.

With phones now being used to pay for shopping, security is becoming an issue for many people. Samsung and Apple tried fingerprint controls, which had weaknesses, but Fujitsu is making progress with iris recognition. As online financial trading starts to grow, what will be acceptable to prove that the person using the device is authorised to make that transaction?

A lot of development work is going into holograms and projective devices. Samsung has filed a patent for a light-emitting device that could be built into the front of a smartphone case. The idea is that your phone projects images or video onto larger surfaces.

This links in with the growth of video conferencing applications that are more secure, to be used to support overseas business and deals without the expense of travel or video conferencing solutions that occupy a boardroom. The growth of 4G coverage, and reduction in the cost of data, means personalised video bridges will become more attractive.

Call recording that is Financial Conduct Authority-compliant is another challenge for the financial services market, as businesses start to have greater dependence on smartphones. Only one of the four network operators offer it, and then only if you contract direct with them. One or two other companies offer services if you take their sims, but it is limited just to some makes of phones. This is of limited use in an environment where you may be in the middle of your mobile phone contract, your staff have multiple devices, or even worse, if you have a BYOD (bring your own device policy).

This has led to some finance companies having a “we will call you back policy”. Many modern phone systems and VoIP solutions offer mobile clients, which allow users to effectively have their office number as an app on their phone that enables BYOD to work. But a word to the unwary: very few VoIP solutions have call recording that is FCA-compliant, and it is not an area that all suppliers seem to understand.

However, cramming our phones with an ever-increasing variety of functions is unlikely to secure anyone’s future. Why? Two words: battery life.

The thing about solving the battery problem is that finding something that performs better than lithium-ion packs is going to be a hard nut to crack. So do not expect huge leaps any time soon – look at the low battery life of the Apple Watch. Potentially solar or motion-based charging may help to extend use.

And with that in mind, a lot of effort (especially from Google) is being put into modular smartphones.

Think of Google’s Play Store: lots of different individuals and companies developing apps to meet a variety of demands, and you choose the apps you want on your phone. Now apply that concept to hardware. With a modular phone, you choose the components, meaning you will only pay for what you actually want. Additionally, if a component goes wrong, you only need to replace that one component and not the whole phone, and, yes, that is the environment smiling at that idea.

Perhaps the days of the phone giants are limited. Perhaps tomorrow’s fortunes will not be made by tech companies headquartered in California, Seoul or Redmond, Washington. Perhaps the future is not about the iPhone or the Samsung. Perhaps the future belongs to smaller operations creating components for our phones.

Dave Millett is managing director of Equinox, a communications consultancy