Disruption in the banking and financial services industry is taking its toll on banks. Banks are losing the traditional transaction fees thanks to companies like Starbucks that allows customers to do a single transaction of $20 to fill up their card. This action denies two or three additional transaction fees for the banks to collect. Crowdfunding players like Kickstarter and Lending Club are taking potential business loans away. With the tokenization of Apple Pay, banks will lose customer transaction data that would allow them to better serve their customers. Plus, mobile is reducing the need for customers to actually visit a branch as you’ve seen and helped cause the closing of the grocery in-store branches.
How do banks get ahead? How do banks stay relevant? The most basic answer is customer experience. Customer experience leads to loyalty which leads to profitability. Research has shown that banking customers chose excellent customer experiences over price. Forrester conducted a study that showed that customer experience leaders outperformed the S&P500 by 29% and laggards by 75%. Providing value through customer insight can give banks a competitive edge. Discovering patterns in customer behavior and alerting them to situations that can impact their financial health would be a huge step. This predictive banking also yields an opportunity to provide financial assistance from other bank services in advance of their need.
Gamification strategies, local shopping days and local bank-initiated crowdfunding can provide an added boost to the perceived value of your bank. These “outside” services would provide additional revenue streams and a greater number of transactions. Banks can work with customers to separate average monthly bill expenses from monthly income and track spending patterns to alert mobile customers when they are getting low on “non-critical” funds. These trends combine to show predictive banking as the future of banking should they want to remain relevant.
Regional and national banks have made steps with an adaptive “mobile-friendly” websites and a well-reviewed app for iOS and Android. Smaller and often rural banks have not made this jump nor do they plan to anytime soon. Yet these efforts are falling short of customer expectations. They are often too restrictive in their features and treat smartphone and tablet users as the same which is far from reality. Even large banks like Wells Fargo produced a “mobile-friendly” site that leaves a lot to be desired.
Mobile is predicted to eclipse online banking in 12-18 months, mostly thanks to mobile check deposit. Many, including me, have left banks that do not offer this service which is now seen as a standard requirement for any banking app.
Agility is the key word in mobile development. Customer expectations of app updates, however unfair it may seem, are about every 6-8 weeks. If a company goes 5-6 months without an update, then customers cry “Foul!” and become upset with the brand. The updates don’t need to be large updates. Small incremental updates often keep them happy and content.
Basic bank mobile app features should include:
- Access account balance
- Deposit check
- Transfer funds
- Pay bills
- Mobile alerts (account balance)
- View transaction history, including check image
- View e-statements
- GPS-enabled location finder
There are several mobile app features that could be added (without going into detail):
- Report fraud
- Report lost/stolen cards
- Set up appointments
- Send money to anyone’s bank (P2P payments)
- Geo-location or beacons at each branch to market other bank services
- Mortgage center
- Auto loan center
- Spending report
- Savings goals
- FAQ / How-to
Improving the customer experience isn’t only about the customer mobile app. It can, and should, happen inside the bank. Beacons could be used to help employees recognize a customer and predict the reason the customer is there. In-branch WiFi can promote other bank services with custom splash/login pages. Employees armed with tablets facilitate improved product/services explanations and the cross-selling of products in a relaxed, comfortable setting. These tactics can improve and modernize the image of the bank and its customer experience.
Banks may understand that their customers are mobile, but have yet to take advantage of that leaving them exposed to startups and new paradigm shifts in payments and consumerism. While restrictions placed on banks may make progress difficult, new startups are bending the rules and finding alternative paths to providing people commerce on the go and eating away at the banks bread and butter.
It’s about providing a personalized experience and being responsive to the customer needs. It is time for banks to break down the old walls that restrict them from joining today and moving into tomorrow.
What do you think are the most important features a bank app should have? What do banks need to do to stay relevant?