It’s no secret; mobile banking is a requirement for financial institutions (FIs) today. In 2017, we noticed a few key trends that set the stage for where we are today. These trends are; enhanced customer experience via the mobile device, new authentication methods, and big data.
Many traditional FIs have begun to change their approach to mobile banking for several reasons, including growing competition from an innovative field of fintech providers. With so much growth, it is critical to be mindful of consumers’ actual mobile experiences and how they impact the relationship with the FI. Consumers have firsthand knowledge about what makes mobile banking simple and efficient, or cumbersome and time-consuming.
As the first quarter of this year ends, 2018 is already a promising year for the mobile banking market, as increased pressure from consumers pushes the financial services industry to birth innovation in customer experience. FIs and their providers must produce a frictionless mobile experience that meets expectations set by players such as Google™, Amazon®, Facebook®, and Apple® (GAFA). Larger banks are now looking to former GAFA employees to spearhead their customer experience as well.
Digital onboarding via the mobile device will soon be table stakes. Research supported by Aite predicts that digital onboarding will continue to progress in larger institutions and that this will be a large focus for smaller FIs throughout 2018. Customers opening accounts are making decisions based on the ease of use and capabilities of digital banking apps.
In February, several consumers were outraged when they experienced a digital banking downside … downtime. TD Bank’s online and mobile update turned sour when their outage caused some customers to be without digital banking for up to a week. In another odd turn of events that month, customers could mistakenly access other user’s accounts at JPMorgan Chase. In each instance, consumers quickly turned to social media, complaining of support wait times at over an hour. PR apologies fell on deaf ears, and customers helped each other solve their support issues via Twitter! These are just a few examples of what can happen when mobile banking services crash and burn, sending consumers running for the hills.
Mobile banking will continue to see a shift in authentication technology this calendar year. With identity theft skyrocketing, device identification via biometrics has become increasingly important. Many FIs are starting to associate specific devices with customers if they used the device previously with an undisputed transaction. Fingerprinting is one example of how biometrics can help layer an effective authentication process. Knowledge-based authentication (KBA) is quickly becoming an authentication method of the past and will likely be mostly abandoned in the next 1-2 years.
Big data is here to stay, with predictive analytics as its sidekick. Big data is no longer just for large banks. Currently, FIs are data rich and insight poor, falling short on mining their customers’ financial behaviors. Despite big consumer questions (Am I saving enough? Can I pay these bills?), FIs will soon be racing to become the “financial Fitbit” for consumers. It will be up to community banks and credit unions, and their vendor partners, to develop an analytic strategy that works for each institution. For example, using transaction analytics an FI could flag a user that has spent over $750 in car repairs in less than 90 days. The FI would be wise to track the spending habits of the consumer and proactively send a mobile alert with an appealing interest rate for a future car loan. FIs should harness and interpret patterns, behaviors, and analytic data sets to increase touch points with their customers, increasing customer satisfaction and loyalty.
Bottom line, for FIs to succeed with mobile engagement, it is crucial to execute on a solid and innovative strategy to deliver an exceptional mobile banking experience.