Mobile banking: insights from industry research

Banking has a problem. It has long been associated with poor customer service. Getting in touch with your bank used to mean standing in a queue at lunchtime or being trapped in a frustrating holding pattern of robotic options on the telephone, whilst you wait to talk to a human.

Consumer expectations however have changed. We no longer have the patience for this kind of friction. As a result the sector is being disrupted. Mobile-first banks like Revolut and Starling, for example, are picking up customers because they roll with these changing expectations. Here Frans Labuschagne, UK & Ireland country manager, from mobile authentication and security firm, Entersekt, examines the evidence.

Insights from digital banking industry studies, published in 2018 by leading research and advisory firms, highlighted an important trend that has led industry leaders to reflect on a core aspect of a future strategy: the customer. A renewed focus on the customer was a central theme running through consumer surveys, research reports, advisors’ recommendations, conference panels, and social-media discussions among industry experts. Tracking all these discussions provides insight into what it is that customers want, what it means for the industry, and how mobile banking fits into the picture.

If it’s good for the customer, it’s good for the bank

In its 2018 global banking outlook, Ernst and Young (EY) reported that digital transformation was a business priority for 85% of banks. Investing in technology is, of course, central to reaching digital maturity, and EY’s study found that for 67% of banks, this investment is focused on acquiring, engaging, and retaining customers.

It might seem like a simple approach, but Capgemini’s 2018 world retail banking report summarised one of the key challenges that banks face when making a strategic priority like this a reality: “as the world’s consumers embrace digital adoption, so too do retail banking customers expect seamless service across multiple channels and all lifecycle stages.” User experience thus becomes the foundation of the overall customer experience.

The path to engagement

Mobile banking, and mobile banking apps in particular, have become a central field on which the customer-first approach to banking is being played. Results of recent surveys polling customers on their preferences and satisfaction when it comes to mobile banking show that there is still a lot of work to do.

Research, conducted by JD Power into customers’ satisfaction with their banks, indicated that banking customers that only use digital channels are the least satisfied with their banks, compared to customers that also – or even exclusively – visit branches. Capgemini’s World Retail Banking Report 2018 confirms this: “customers are generally better satisfied with online banking and branches than with mobile banking apps.”

Cataloguing what customers want, Javelin’s mobile banking scorecard identifies and weights the mobile banking categories that customers indicate are most important to their satisfaction with the channel. According to the report, these categories are, in order of their importance to customers, money movement (23%), ease of use (22%), security empowerment (21%), financial fitness (17%), customer service (11%), and account opening (6%).



Source: Javelin Strategy and Research: Mobile banking scorecard 2018

A deeper look into Javelin’s categories indicates that customers want added functionalities delivering one-stop convenience, a user experience focused on streamlined and easy-to-use navigation, and greater control when it comes to security.

This seems to agree with the argument that when customers are given more control, they feel more secure, and are therefore more likely to engage with a channel or service. Ultimately, mobile banking customers demand not only greater control, more security, or supreme convenience – they want a combination of these categories, presented to them in a way that is as innovative as it is relevant.


Mobile on its own is not enough

Over the last few years, mobile banking has been a key focus area for many banks embracing a mobile-first strategy, but this is no longer enough. As Gartner argues, these banks now “find themselves in a situation where they need to round out their technology investments in other digital channels” to meet consumers’ demands.

Add to that the fact that mobile banking adoption has plateaued over the last few years, and it becomes obvious that customers are looking for more than just an app. In fact, analysis from Javelin Research and Strategy predicts that mobile banking adoption will lag behind online banking for the foreseeable future. The firm advises digital banking strategists to “shift their focus from basic adoption to deepening engagement.”

An omnichannel approach

When it comes to engaging customers, banks need to provide an omnichannel experience that is, primarily, customer-first. As Forrester emphasises in the firm’s 2018 banking customer experience index, digital-only might not be the best strategy. “Conventional wisdom states that customers prefer digital experience,” the report states. “As a result, companies race to create entirely digital experiences to entice customers away from contact centers and branches. That’s a mistake. Our data shows that the real situation is more complex.”

The real situation, as Capgemini argues, is a landscape characterized by “disruption from unexpected competitors, explosive growth of new technologies, and relentless consumer demands.” The only way banks can remain competitive is through reinvention, adopting an approach that goes beyond mobile-first or digital-only to engage customers through whichever channel they prefer.

Frans Labuschagne, UK & Ireland country manager, Entersekt