Part Three: Mobile Banking and the Future of Loyalty, An interview with Michael Hemsey and The Credit Union Times

May 13, 2013

The slogan used to be “there’s an app for that.” But for the banking and financial services industry, it’s not so much an overused expression as it is a statement that raises a fundamental question. Is there a mobile banking app out there that can genuinely engage customers, increase conversions, reduce costs and simply be fun to use, mimicking the types of app experiences found in other industries? At least one app, Mint, is trying to address these capabilities.

Another critical question is how a well-developed loyalty program can be used to further enhance the customer experience. And is it really possible for a mobile banking app to be as fun and as exciting as the latest mobile games? The answer may surprise you.

In this final of our three-part series based on an interview with the Credit Union Times, Kobie’s Michael Hemsey discusses how “plain vanilla apps” won’t get the financial services industry anywhere. 

Mobile Banking, Loyalty Program, Financial ServicesThe folks at Intuit® are hoping to get consumers to spend a lot of time using their Mint app, a personal financial manager that’s been pretty successful. Is it a good idea? Can it be more successful?
Mint is definitely a good idea. But there’s always a risk: if you build it, will consumers come? In this case consumers will come. Why? Because the app lends itself to more creative thinking than we’re seeing elsewhere. Even simple things like alerts and the notion of security, fraud and privacy. The banking industry is central to all of these issues and using mobile to send account alerts – especially in households with multiple credit and debit cards – is imperative.

How do you see bank loyalty programs evolving? Will their user frequency increase?
With the debit interchange issue and what happened to loyalty programs, banks have not turned away from offering loyalty and incentives for use of their debit and credit cards. Bank loyalty programs need to be more relevant. Mind you, banks work on this all the time. Kobie works with a lot of the banks that do so. They’re continuously focused on how to provide a better-integrated loyalty experience. On a macro level, the ability to provide offers that are germane to user interests and spending habits is essential.

Someone using their mobile banking app for 15 minutes might strike you as odd. What can they be doing for all that time? But that’s where banks have to get. Do you have a sense that banks realize their apps are primitive and that it’s time to raise the bar? I heard a senior executive at JP Morgan Chase say exactly that. Their goal is to build an app that’s as good as the best-selling game app. He’s not there yet. But they’re trying. Do other banks think that way?
The JP Morgan reference is very insightful. It speaks to what we’ve been discussing – providing more utility and a more social (and fun) mobile banking experience. Some banks are thinking that way, but not enough. Banks tend to rest on their laurels until someone comes out with the newest offering and then they follow versus lead. Whether it’s for IT reasons or otherwise, many banks are risk-averse.

Will mobile banking apps become the most frequently downloaded apps in Apple’s app store or Google Play, rivaling the coolest games? That’s unlikely, at least anytime soon. But the good news is that the financial services industry is clearly beginning to think creatively and is rapidly learning from other industry mistakes and successes. Whether 2013 or 2014 becomes the year where mobile banking apps take on Siri-like qualities and include social media real-time engagement also remains to be seen. But with thought leaders in the financial services, loyalty and IT industries addressing these challenges, mobile 2.0 for banking can’t be too far off.

If Mobility Matters: Getting to Mobile Banking 2.0 and this Q&A are conversation starters, where do we go from here? Since the vast majority of Americans use traditional banking services and more than half are smartphone owners, mobile engagement is becoming increasingly commonplace.

Ultimately it’s up to consumers to help banks navigate our mobile needs and wants. Let’s begin that part of the conversation in the comments below.