Banks and financial institutions, eyeing the shift to mobile banking, are reacting quickly to improve the experience of their users. That will set them up to influence customer preferences for digital channels and drive the future of banking.
Mobile banking is on the rise. As consumer expectations evolve, providing people with the ability to execute transactions and other banking activities using mobile applications on a smartphone or tablet has become table stakes for banks and other financial institutions.
With more banking activities becoming available outside of physical branches, consumers are increasingly turning to mobile banking solutions to manage their money. In fact, “The Fintech Effect,” Plaid’s 2020 fintech report, revealed that the COVID-19 pandemic accelerated fintech adoption, with 59% of Americans using more digital banking tools now than before COVID-19. With an estimated 169.3 million mobile banking users in the U.S., most Americans view these new digital banking solutions as the “new normal” for managing their financial lives, and 80% believe they can now manage their money entirely without a bank branch, instead favoring contactless digital solutions. Remarkably, 56% of those surveyed who bank digitally say they could “never go back” to the world of bank branches and paper statements.
But what is prompting this shift in consumer expectations? Mobile innovations that enhance the user experience. Whether viewing account balances, making payments, or depositing checks, mobile banking apps make banking increasingly convenient and similarly secure to traditional brick-and-mortar banking while also delivering additional features that promote financial well-being.
By providing a high-quality in-app user experience (UX) that better nurtures customer relationships and expectations, banks can drive improved consumer engagement, build a competitive advantage and gain an increased market share.
See also: Emerging Markets Leapfrog Into Digital Banking
Ways Mobile Banking Apps Improve the User Experience
The UX is critically important for banks. If a user has a poor experience with their financial institution, they’re likely to seek a competitor that leaves a better impression. To that end, a 2020 survey found that consumers think an easy-to-use mobile app is the most important feature a bank can provide. Consequently, a bank’s mobile application should make it simple to efficiently and effectively complete tasks without any unnecessary friction.
Providing Convenience to Simplify Financial Lives
The most obvious benefit of mobile banking is anytime access to your bank account, regardless of location. Mobile banking apps implement know-your-customer (KYC) guidelines, so customers can seamlessly open a new account within minutes using just their smartphone, an ID, and social security number.
For consumers, mobile apps eliminate the inconvenience of driving to an in-person branch and wasting time waiting in line to cash a check, make a transfer, pay a bill or make a deposit. Simple, convenient banking apps also enable users to invest within minutes and be approved for a loan or early payday with just a few clicks.
Taking it a step further, by integrating AI and voice technologies into their mobile app, banks and other financial institutions are able to leverage predictive analytics, voice recognition, and a recommendation engine that only gets smarter with every transaction to intuitively manage consumers’ finances. With AI and voice, customers are able to easily conduct routine banking activities like checking balances, sending money, or easily finding an answer by querying the app. Imagine a personal banker with instantaneous access to market information and your personal financial information who can provide unmatched insight into your personal financial choices and goals in real time, empowering you to make the right choices for your finances — now and in the future. Their simple, convenient and intuitive nature is one way mobile banking apps enhance the user experience.
Since financial account information is among the most sensitive personal data that exists, security is of critical importance. Preventing identity theft and financial fraud is paramount for banks, and mobile apps allow customers to customize their security settings. Today, users can utilize mobile apps to bolster their financial security, whether turning on/off international spending while traveling, freezing online spending to protect against compromised accounts, or simply creating spending limits to help budget and protect against overspending.
Additionally, while easily forgotten passwords and access codes can make logging in a time-consuming endeavor, advances in technology — fortunately — make speedy, secure logins easier than ever. Biometric security implementations like two-factor authentication, fingerprint scanning, and facial or voice recognition help banks meet user expectations for data privacy and security. Plus, those aforementioned KYC guidelines ensure users are who they say they are. Delivering users a mobile banking app with baked-in security measures can build trust and improve the UX.
Enabling Custom Personalization
Finally, customers can stay on top of their finances by setting up in-app alerts for minimum balance requirements, bills due, transaction notifications, automatic transfers, geolocation, etc. Each user is unique and prefers that banks use their personal data to understand their individual preferences and goals and deliver personalized interactions and communications that empower them to achieve their financial goals.
With mobile apps, users have access to special features like consulting a financial advisor directly through the app, contacting customer service, watching how-to videos, or using budgeting tools. There are opportunities to create different savings accounts and track the progress of each goal directly from a smartphone. Users have all of their financial information available at the tip of their fingers — through one personalized mobile app.
By presenting the custom-tailored information a customer desires in a clear and intuitive way, mobile apps can help humanize the mobile banking experience by mimicking the one-on-one relationship a customer has with their personal banker who understands them, knows what they need, when they need it and how they prefer receiving it.
Now that we recognize how mobile banking apps can enhance the UX, let’s delve into the importance of combining high-tech with high-touch experiences.
High Tech + High Touch = Optimal User Experience
When it comes to mobile banking, it all starts with the high-tech app and ends with the marriage of a user’s financial worlds — banking, payments, investments, financial goals, and beyond — to make money management as easy as possible. By consolidating all of a user’s financial information in one unified place, mobile banking apps provide users with a holistic view of their financial well-being and equip them with connected tools to manage their personal financial well-being and track progress toward their goals.
A focus on in-app user experience innovation has helped forward-thinking banks and financial institutions on the cutting edge establish a better market position. However, some banks and financial institutions continue to lag behind the digital transformation and haven’t yet realized the myriad benefits of enhancing the UX via mobile banking. Fortunately, there are options for these laggards. They can either create their own mobile app, which is incredibly challenging because of how they’re structured, or they can partner with a fintech organization to fulfill customers’ needs and shape the future of finance. While the increased focus on the mobile banking UX has helped some institutions, it ignores another critical factor: the human touch.
Despite the increased convenience and flexibility, improved security, and personally tailored service offerings mobile banking apps unlock, blending digital and human experiences is as important as ever. Consumers have more banking options than ever, and humanizing the banking experience can help ensure your users are not seeking new banking relationships.
By combining digital and human experiences, and providing real people to talk to in the event of an issue, mobile banking apps enhance the convenient mobile banking experience with a personal connection. Blending a human touch into digital interactions with customers can help engender trust, which is often lacking in a digital context. And as consumer needs and queries grow increasingly complex, chatbots are woefully unequipped to adequately provide the same satisfying solutions to extraordinary consumer challenges as their human counterparts.
Humanizing digital banking experiences can increase consumer engagement, enhance trust, and foster deeper, personalized relationships between banks and users.
At the end of the day, banks need to prioritize the UX to meet constantly changing customer expectations. Users increasingly expect not only more convenience and flexibility and better security from their mobile app but also more custom-tailored services and high-touch banking experiences. Mobile banking will continue to excel at simple, transactional activities, and the banks that enhance those digital experiences with the human touch can help ensure those behaviors stick over the long term.
As mobile banking momentum continues to pick up steam in our post-pandemic world, user expectations are high — and growing higher every day. The banks and financial institutions that understand this shift and react quickly to improve the banking experience of their users will set themselves up to influence customer preferences for digital channels — and the future of banking.