Mobile penetration across consumer segments has risen so rapidly that 87 percent of U.S. adults now own a device – and half of that population has a smartphone. This aggressive new rate of adoption creates both unprecedented opportunity for and demands of financial institutions regarding their mobile products.
Customers already use banking apps for remote deposit capture, loan management, bill payment and account alerts. But data reveals a hunger for additional capabilities, even in the already-maturing world of mobile commerce. In fact, 57 percent of respondents in a recent smartphone user survey said they would be more inclined to purchase goods on the device if they could do so through their bank’s branded mobile app – particularly for expensive items. Forget future benefits – for financial institutions, viable revenue streams are already on the table waiting to be collected.
All signs indicate the mobile revolution will expand and persist, and FIs are wise to embrace it. Never before have they had the chance, unfettered by the limiting legacies of established architecture and practice, to maximize ease-of-use and improve the customer experience in highly relevant ways.
Into the Mobile Looking Glass: The Financial Future
Though mobile technology has and will continue disrupting existing FI strategies, banks’ flexibility will be rewarded with a positive transformation of the way these financial institutions and their customers interact.
Here are just a few of the ways mobile devices will impact the future of finance:
- Digital payments will change the way we think about money. Mobile advancements will render all but obsolete the need for brick-and-mortar branches, shifting attention instead to digital wallets and virtual currencies. As developers find new ways to mitigate concerns over mobile security and account fraud, digital currencies will move to the forefront of an industry-wide shift towards virtual payments that will operate primarily through the mobile channel. As payment trends across all industries evolve, traditional banks and financial institutions are warming to the many payment services and options that can be delivered through the mobile channel.
- Mobile platforms will redefine the consumer relationship. More than ever, banking customers today demand barrier-free access to their assets. The proliferation of smartphone technology has forever changed the future of financial institutions by putting banking and financial services at customers’ fingertips and establishing the mobile platform as a 24/7 access point that can address their every financial need. Mobile technology has put FIs ubiquitously at their fingertips – in the process uprooting the traditional customer relationship into a seamless, interactive electronic landscape.
- Linking financial institutions and customers will facilitate constant and transparent communication. At the core of any mobile strategy is the technology’s ability to facilitate an open and easy information exchange at any moment, anywhere. As financial institutions have taken advantage of functionalities like SMS and in-app mobile messaging to notify customers when their checks are deposited, when balances reach a certain level, of ATM withdrawals or when charges are incurred, more opportunities are being created to communicate with account holders, genuinely and transparently. Mobile’s transformation of banking services will continue to push FIs to innovate and provide more immediate and convenient ways to interact with customers and build stronger relationships. With this we will see much more personalized experiences based on the customers’ past behavior – having an opportunity to introduce marketing messages during key points of the buying process. This will open up a tremendous opportunity for building customer loyalty not only with the FI but also with their cobrand and merchant partners in ways that haven’t been available historically including at point-of-sale.
- Empowerment through collaboration. Microfinance and crowdfunding demonstrate a broad shift in certain consumer segments from a “me culture” to a “we culture,” and FIs are adapting to serve it. At the core of this model is one that encompasses the “four P’s” of modern economics – profit, people, planet and purpose – proving that today, banks and financial institutions are determined to make a difference beyond revenue potential. Their mere presence in the equation, in addition to the required collaborations with other businesses, establishes a brand identity that appeals to young and cause-minded consumers.
Mobile Paves the Way for Financial Growth
According to a recent J.D. Power & Associates survey, customer banking satisfaction has returned to pre-recession levels – due in part to the proliferation of smartphone technology and the financial sector’s adoption of new web and mobile strategies.
To expand and retain market presence, financial service companies will have to carefully plan and continually improve their customers’ mobile experience. That requires foresight, testing and a careful ear to consumer concerns. But the rewards are extensive for those committed to the notion that the future is in their pockets. Buying in now means reduced operating costs, more durable long-term relevance and new opportunities to meet customers’ emerging needs for decades to come.