Innovations in Mobile Banking
Mobile banking has been adopted at a much faster rate than any other banking technology. The quick and steep rise of mobile device usage and app adoption has dramatically altered the path of consumer banking behavior. Bank Innovation quotes a CIO at a leading European retail bank: “In any one minute, we’ve more people in our mobile app, than in our entire branch network in a week. The only problem – the average user stays for just 17 seconds.” Banks and credit unions are looking to keep pace with these changes and challenges through innovation.
In a previous post, we discussed three areas of innovation for banks and credit unions. These innovations are targeted to meet the needs of Millennials, and the growing base of mobile banking users who prefer using their apps over in-branch visits. Innovations such as biometric authentication and cardless cash address security and a growing customer demand for convenience and flexibility. While social media offers a new network and channel of communication for the finance industry, it is also a threat and opportunity for innovative products leveraging the new norm of interconnectivity.
In today’s post we focus in on innovation in the areas of communication and core functionality:
Communicating With The Bank
Several years ago, Mapa Research highlighted the ability to communicate with the bank through the banks mobile banking application as one of the most important, and least developed, areas of mobile banking innovation. In their review, only 16% of financial institutions allowed customers to send account specific / secure messages within their app and only 19% enabled receiving.
Research from KPMG shows that today, more than half of global banking customers are looking for communication that combines of social, personalized and “human/human-like” interactions, integrated into a bank’s online service and mobile app. Most are expecting, at minimum, replication and enhancements of familiar experiences such as messaging services WhatsApp and FaceTime.
According to JF Sullivan the future is in WebRTC (Web Real-Time Communication) technology. “WebRTC enables real-time, next-generation customer interactions, such as VoIP calling, video chat, instant messaging, encrypted file and screen-sharing, presence and recording – all at the touch of a button.” This technology enables authenticated customers to be assisted and routed via chat, video or voice along with their transaction history. It also has the potential to pull relevant information from the customers’ mobile app or web screen to improve and expedite service.
When banks and credit unions started their journey into mobile, most prioritized enabling secure access to their core functionality. Core functionality priorities included simplified registration and login processes or transaction views that were simple and conducive for mobile. Apps were often a miniaturized version of a bank’s online banking application limiting innovation. Development was quickly being outpaced by customer demands, as the list of functions users considered ‘table stakes’ grew and new entrants and mobile-only banks grow their position in the industry.
Banks and credit unions have adapted and embraced innovation. In their recent paper: 2018 State of Digital Sales in Banking, Avoka found that 42% of banks reviewed in America, Europe, and Australia have reached the ‘Digital Promise Land’. Meaning that they have the majority of their personal banking products available for digital account opening, lending applications, and onboarding, and they are ready for digital sales. Avoka also found that online account opening functionality nearly doubled in the last 2 years with nearly 7 in 10 offering for personal banking products. This progress is now carrying over into wealth management products as well with a 300% increase of available products in North America.
More banks are building new mobile applications from the ground up. This approach has limitations attached to existing online platforms and redefine the set of ‘core functionalities’. These new designs focus on integrating branch, online, ATM and other channels seamlessly and bring opportunity for new innovations in both functionality and data insights.
JPMorgan Chase Chief Executive Officer of Asset and Wealth Management Mary Erdoes highlighted this shift at a recent Morgan Stanley conference. “And that’s really our journey, is to be able to say, ‘let’s give you your data back in a way that helps you. That makes you smarter.’”
While technological innovation is leading banking experiences into the future, it’s key to remember that there are also less technical opportunities for banks and credit unions to improve their mobile banking app experience.
According to study by Forrester, nearly every mobile app from leading retail and direct retail banks fails to use plain everyday language. This broad miss makes those that simplify the language and avoid bank jargon the innovators. “Clear language drives a measurable and substantial improvement in the customer experience,” say the report’s authors, Forrester analysts Peter Wannemacher, Gina Bhawalkar, and August Du Pont.
How is your financial institution innovating its communication and core functionalities? Share your thoughts by getting in touch at firstname.lastname@example.org.