The ultimate consumer experience in terms of mobile banking apps is evolving too quickly. Fintech organizations are changing the way their clients and consumers interact with their organization. And mobile is being one of the major channels. It was found out by TransUnion’s Iovation unit that over three out of five (61%) of consumers’ banking transactions in 2019 were conducted on mobile phones. Strikingly that figure is up from 52% in 2018 and 28% in 2014.
Another survey showed that finance apps are on the cusp of exponential growth globally, and that includes in North America majorly. According to Citi, 31% of the US adults use mobile banking products more often than other apps installed on their device. Only weather and social media apps win them over by 51 percent and 33 percent correspondingly.
Millennial Consumers are Defining the Trend
As time changed, banking and insurance companies are taking up the mobile-first strategy to represent themselves in the industry. Even though all major banks have adapted to this technology, they are usually presenting little information from balance information, transferring funds between accounts, paying bills, depositing checks using the phone cameras, fraud alerts, and ATM and branch locators. But now the game has changed a lot more. The 2019 Banking and Capital Market Outlook report by Deloitte states that more than one-third of banking and financial institutions have to invest in technologies, such as open API, analytics, and voice banking to improve their competitive market positions. And these are the major functionalities needed.
Voice Banking Services
“Voice banking services are not the future, but the present”
According to PwC, roughly 80% of the consumers are satisfied with their voice shopping experience. 18 million US users have carried out at least one voice payment, and the number is likely to increase by 4 X in the coming 5 years.
Major Example: Artificial Intelligence in Voice Banking has been successfully implemented by Bank of America. Their virtual assistant Erica is already assisting more than 10 million users. Erica is able to send fraud alerts, subscription fee increase or double charges. It also assists in peer-to-peer and bill payments.
Also, Siri is partnering with Venmo to help their users with peer-to-peer transfers, and Alexa has been supporting the payoff of Capital One bills by credit cards for almost four years now.
Voice-based services by banks and fintech apps are no more a revolution: it is indeed in every bank's list to be induced in their banking app. Voice services introduce the ‘banking-on-the-go’ concept, making online transactions secure and seamless.
Open Banking API
Finextra points out, “Open Banking APIs will transform the way customers apply for credit and other products, enabling individuals and businesses to share the bank transaction data seamlessly and securely online without having to fill out paperwork, scan their data and provide information manually repeatedly.”
Open banking and open APIs help third-party developers to develop applications for web or mobile for banks and financial institutions. These APIs enable a secure channel between third-parties and online banking systems. This establishes a secure way of giving providers access to a user’s financial information such as balances, account information, cash flow, and transactions.
Open banking API helps banks and FinTechs to capitalize their use and increase the overall revenue by connecting with new business processes, external partners, tech vendors, and more in a less costly manner. It is a “plug and play” technology that does not require additional coding or costly platforms.
For example, a B2C financial ecosystem is a centralized hub, which can offer deposits from bank A, loans from bank B, insurance from an insurance company or from bank C, personal finance management tool from a fintech company and a ride-hailing service from a third-party provider.
A B2B ecosystem can look like a platform offering electronic invoicing, automated factoring, loans for small and medium enterprises, e-commerce website templates - to name a few.
There are multiple examples of aspiring ecosystems in Europe and Asia, and we are sure it’s a major trend to follow.
“Working on Biometric, onboarding, and authentication”
Banks, credit unions, and financial institutions are making banking available to rural customers. This can be done by extending their reach beyond physical geographic limitations. But optimizing and engaging relies on the use of mobile technologies for onboarding and authentication without sacrificing security.
Biometric and Onboarding - It is a simple, seamless, all-digital onboarding path for the bank’s new customers. The customer can come onboard when they meet AML and KYC regulations which regulate the identity verification during account opening. Customers will make use of the biometric factors based on the Fast IDentity Online standards that include fingerprint, face, and voice matching on the server for ongoing authentication.
Verizon’s 2017 Data Breach Investigations report found 81 percent of data breaches were a result of stolen or inadequate passwords. These credentials are based on what people know, and hackers can steal that knowledge through phishing, man-in-the-middle attacks, or other means.
In addition, password requirements have become extraordinarily complex. Consumers have to remember long phrases consisting of both alphanumeric and non-alphanumeric characters. Also, the average person has 92 accounts registered to one email address, according to Dashlane. To remember them, people tend to base their passwords on information that others can easily know, and use them across many accounts. So passwords are getting more complicated but not necessarily more secure.
Authentication - Biometric authentication can be done in various ways that include voice, fingerprint, and face. And Facial recognition is the utmost way to improve login security by requiring the customer to match their live facial image with biometric data captured during enrollment.
Every time a customer who wants to log into their online bank account, they will have to do it through facial recognition. Additionally, algorithms have been used to perform any kind of detection, which includes liveness detection. This includes an analysis of the facial image to verify that it is a live image of the customer and not a fake image source such as a photo, video, or mask.
Banking apps now provide a lot of expanded alerts. And most of the alerts have been existing because of the customer’s demand. Beyond basic fraud alerts, other notification alerts include:
- Deposit notification
- Due Bills
- Low balance Amount
- Overdraft risk
- Huge amount purchases
- Certain categories of purchase
- Password Changes
- Profile Updations
- Large ATM withdrawals
Additionally, the capability to enroll and manage alerts, including push, text, email and phone alerts or actionable alerts, all can be made available to the user.
You can also use push notifications. Push notifications are not text messages. Those are sent by the app without requiring the person to be in the app. These notifications should be short but can be very powerful for both customer experience and marketing. Uber uses push notifications quite successfully, e.g. “Your car is here, license plate 234LV5.” Open rates for push notifications can be 30% to 60% with interactive rates of 40%, states Ian Blair of mobile app development platform Buildfire.
Digital Payments and Mobile Wallet Access
Digital payment is a must-have functionality for banks and credit unions and mobile is the platform for that strategy.
McKinsey surveyed that more than three quarters of U.S. consumers made a mobile payment in the 12 months ending in August 2019. Every mobile banking app should allow easy access to mobile wallets including PayPal, Apple Pay, Google Pay, and Samsung Pay, or a combination of them.
Digital wallets are not just an idea rather it is already embedded in many banking apps currently. While the current app users might not be an active digital wallet user. But, tomorrow’s customers will be. And digital wallets will be an important part of the future of digital payments and overall customers’ payment experience.
Another idea is to use an account snapshot without logging in. As part of the trend of frictionless digital banking, more financial institutions are enabling this option, whereby consumers can view certain basic information at a quick glance. It has to be carefully balanced with privacy considerations and should be easily configurable by the consumer as to what will be shown.
Alternative language choice is also used popularly. Just as happened with ATMs in another era, multi-lingual banking apps are showing up to appeal to various market segments. Both Bank of America and U.S. Bank, among others, have come out with Spanish language options.
The world of mobile banking is an ever-expanding one, and you can bet that consumer demand will drive its future. Also, bigger banks offer superior digital and mobile banking offerings compared to others. So it is important to research all the valuable aspects of a good mobile banking app that work best for you.