The worldwide population of smartphone users swelled past the 1 billion mark in 2012, and today experts expect more than 1.75 billion users. An estimated 73% of them want to access their financial accounts through a mobile app, and 53% want to use that same app to view their transaction history, and preferably their rewards information in a completely integrated experience. Enterprise customers provide limitless possibility, but will require a different app integrating now-disparate components of their business.
Mobile apps in the banking and financial services sectors reduce business costs and keep brands current by enhancing the overall customer experience. These apps offer capabilities like location-based discounts and rewards, in-app banking alerts, one-click bill pay, money transfers, authentication services and more. For FI brands looking for ways to interact with their customers and boost revenue, the mobile application platform presents a significant opportunity to present an innovative, engaging, convenient, and seamless banking experience.
In addition, opportunities abound across consumer segments. Some 32 million U.S. households are expected to use mobile banking by 2016, while 64% of Millennials – a generation with $600 billion in purchasing power – already use mobile devices regularly to make purchases.
Given their history as being part of an established financial system, with refundable transactions and government-backed insurance, banks have clear advantages over other platforms and virtual crypto-currencies. However, because they charge higher fees and are typically slower to adopt new technology, financial institutions encourage customer curiosity about emerging offerings. Even with a mobile app, FIs must continue exploring new strategies for engagement – creating new and relevant offers that provide choice and scalability to keep the undivided attention of the modern customer and fit seamlessly into his or her daily life.
Customers Don’t Fit Mobile Apps – Mobile Apps Fit the Customer
For financial institutions, a well-designed mobile app has the potential to establish a platform for relevant and meaningful brand-customer interactions, build consumer confidence in the brand and create opportunities for those brands to drive real customer loyalty. Focusing on emerging functionalities – such as digital wallets, geo-location services and push notifications – can help financial institutions offer a seamless and competitive retention strategy.
The following three perspectives provide insight into the way institutions’ mobile applications can enhance consumer experience:
Digital wallets are the future of financial services.
As smartphone usage increases, so does the prevalence and acceptance of digital wallets. By 2017, industry experts predict 29 million North Americans will use mobile wallets, generating $44 billion in revenue. This surge in popularity is a product of more discriminating consumers, who seek the ability to carry fewer payment cards and prefer easy-to-use apps that support a variety of needs.
Mobile wallets can entice loyalty by offering rewards tracking and integrating multiple virtual and loyalty currencies into a central location. Demand is already there, with 55% of consumers expressing interest in the use of rewards or points to make payments through their mobile wallet and businesses increasingly accepting the practice.
However, both merchants and consumers are concerned with e-commerce security, from online banking to virtual currencies and beyond. The Federal Trade Commission warned in 2013 that free digital wallets, and even prepaid cards used online, lack the federal protection of limited liability attached to credit and debit cards. Consumers seem willing to pay for the use of systems that establish a comprehensive level of trust and security for mobile wallets. This puts nimble financial institutions and interchange networks uniquely in position to attract and retain new customers.
In-app mobile messaging and push notifications provide customer insight.
While promotional email continues to hold strong as an effective means of marketing communication, the channel is unable to exploit perishable marketing opportunities with short publication cycles. In-app mobile messaging and push notifications enable financial institutions to enhance customer loyalty with techniques such as “flash sales,” which provide continuous opportunities for brand engagement.
Consumers download mobile applications from financial brands primarily for two reasons: convenience and access to exclusive offers delivered through the app. Of the 60% of consumers who download mobile apps, 70% have enabled push notifications, which can take the form of special sales, payment reminders and the status of a recently-placed order. Since push notifications use more in-depth analytics and provide access to data concerning the delivery, open rates, time and engagement of smartphone users, the technology can give banks and financial institutions more insight into how their customers behave.
Geo-location services offer both relevancy and protection.
Another significant feature of smartphones is their incorporation of GPS technology. From a messaging perspective, geo-location services enable brands to send customers relevant offers and information – as directed by transactional and CRM data – when consumers are near branches or other points of individual interest. The lifestyle data captured can curate partner merchandising offers, drive sales and measure how appealing brand efforts are to customers, or not.
From a security perspective, FIs can also leverage geo-location services to determine credit card or mobile device loss and prevent account fraud.
Making the Case for Mobile Applications
According to a report on mobile phone app statistics, apps developed by FIs only constituted 3% of all downloads in 2013 – a surprising result given that 51% of all smartphone users have used mobile banking over the past couple of years. For banks and financial services brands, the key to growing this statistic is developing a mobile app with more convenience and capabilities than in-person banking. The product’s value must be conspicuous – apps should operate on a simple user interface, incorporate clean design and assimilate seamlessly into customers’ daily lives. In addition, they should enhance the customer experience by offering in-app messaging, push notifications, geo-location services and digital wallets while ensuring user security.
Integrating these solutions within a mobile app and evolving with customers’ needs empower financial brands to position themselves as an indispensable, effortless and central part of the consumer’s life. Which is exactly where they should be.