Mobile banking: Why the experience matters

The pandemic boosted mobile adoption across generations, but banks are betting users will stay for the right touch and feel.

When the COVID-19 pandemic spurred a 30% spike in traffic from mobile devices, First Foundation Bank decided it was time to get serious about that channel.

“Our first focus was on the online banking platform, but it was fascinating to watch how human behavior changed,” explains Lindsay Lawrence, chief operating officer of the $10.2-billion-asset bank based in Southern California.. People now essentially live on their phones.”

Recognizing how critical the mobile channel had become, First Foundation designed a new mobile app to deliver a wealth of benefits—from reducing branch operating costs to creating an efficient, engaging customer experience to win their long-term loyalty.

First Foundation’s mobile initiative looks like a smart bet as customers grow more comfortable with self-service banking.

According to the BAI Banking Outlook for 2022, mobile channel usage is expected to rise to 22% of consumers in the next three years, roughly matching online banking’s anticipated usage. In the same survey, branch banking declined slightly to 19% and drive-up dipped to 13% of the total omnichannel mix.

“The efficiencies that our clientele will gain from a strong mobile app are so important,” Lawrence says, noting that an effective mobile app also has benefits for the bank itself. “It obviously helps knock down costs overall.”

Lawrence says it’s too soon to tell how customers are responding to the new app, which is designed to help customers gain deeper insights into their finances. But one bit of anecdotal feedback is positive. The Generation Z and millennial children of First Foundation’s board members like the app’s features and strongly recommended the app to their parents.

BAI’s 2022 outlook found that mobile matters, particularly for the younger generations. When opening a deposit account, 37% of Gen Z respondents prefer to do so via mobile, compared with just 12% who prefer to use the branch. By contrast, only 12% of baby boomers said they preferred to open deposit accounts on mobile; 58% said the branch was the way to go.

John Hanley, senior vice president and senior director of marketing for Equity Bank, says the surge of mobile traffic prompted by the pandemic lockdowns in 2020 has receded. “But we have seen sustained growth in our mobile and digital banking,” he says.

The $5 billion-asset community bank based in Wichita, Kansas, has 70 branches in Kansas, Missouri, Arkansas and Oklahoma. Hanley says the bank has struck a healthy balance between branch and digital activity.

“One of the great things about mobile banking is that it makes access easier for customers anywhere in your footprint,” Hanley says. He estimates about 70% of Equity’s customers use some form of mobile or online banking, but bankers in the branch are still an important part of the equation.

“People continue to want assistance with making complex financial decisions like buying a home or starting a business,” he says. “They may be starting relationships with us via mobile or digital. But our customers put a high level of trust in our branches in case questions do arise.”

Equity Bank will continue to promote and build value for its mobile channel. “We are always trying to get more digital and mobile usage across our product line,” Hanley says. “We realize that is how people interact with their bank, their insurance company, their phone company.”

Tom Martin, CEO of Glance Networks, says the “pandemic let the cat out of the bag” when it comes to mobile banking. The Wakefield, Massachusetts-based company creates digital engagement solutions for the banking industry and others.

“The mobile phone increasingly has become the single point of interface,” Martin says. “The phone is never out of the customer’s pocket. You can do messaging and provide a level of engagement that exposes the customer to other parts of the bank.”

The phone brings the bank to the customer. “That makes it more approachable for people who have not wanted to bank with a traditional bank,” Martin says. “Mobile and digital can be a facilitator.”

He adds that a mobile-savvy bank meets customers wherever they are—almost invisibly and without friction. “It’s that level of invisibility that will be the new battlefield for banks. Product, feature and price are no longer the competitive differentiators in banking. It’s the experience.”

Edmund Lawler is a BAI contributing writer.

Gain insights on where mobile banking is headed from the BAI Executive Report, “Mobile banking is on the move”.