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Building loyalty via the mobile connection

Across all age groups, users’ comfort level with mobile banking has increased dramatically, with apps taking precedence over desktop or in-person options.

May 24, 2023 / Customer Experience

Consumers and businesses alike increasingly rely on their mobile devices for banking activities, making a robust mobile app vital for financial institutions to succeed in today’s competitive environment.

The numbers tell the story. Across all age groups, users’ comfort level with mobile banking has increased dramatically, with preferences shifting toward apps over desktop or in-person options. Today, a solid majority of consumers use mobile banking, led, unsurprisingly, by younger generations who have shifted overwhelmingly to mobile devices.

While in-person interactions have declined in number, digital users engage with their financial institutions much more frequently than their branch-based counterparts. According to research, 47% of users who conduct banking activities on their mobile device do so at least once a week, and more than 10% transact every day. The statistics are similar for website users, with 46% banking online weekly and 10% doing so daily.

This level of frequency provides banks and credit unions with significantly more touch points during which they can influence users’ trust and build loyalty. But Americans have an average of five financial accounts, so being an individual’s primary institution is far from given.

In this climate, there are three imperatives for smaller institutions to deliver a mobile banking solution that will help them attract and retain consumers and businesses.

Make it modern: When it comes to delivering an easy-to-use mobile app, companies like Amazon and Uber have set the bar high. Offering newer, more innovative features in addition to basic banking capabilities will help banks and credit unions differentiate their brands. The small-business segment represents a promising opportunity for community banks and credit unions. According to research from Aite-Novarica, only 58% of today’s 30 million small businesses currently bank with one of the four largest U.S. institutions—and 60% of these businesses say they would switch to a community bank if it offered a digital banking solution comparable to that of larger competitors.

Make it seamless: The best mobile apps are built to integrate with these fintechs in a way that feels connected rather than disjointed. A growing number of banks and credit unions provide support to mobile users using AI-powered chatbots, although only 26% of digital banking users report being very satisfied with this technology. Notably, the satisfaction rate more than doubles when chatbots have the ability to connect the user to a live person for support. For business users, it is important to remember that many conduct their company and personal banking with a single institution, so financial institutions should enable users to connect to both business and consumer accounts with a single login.

Make it personal: It’s fair to say that financial institutions have the potential to access more data about their customers and members than other types of businesses because financial activity touches so many parts of a person’s life. Capturing this data can help financial institutions create a much more comprehensive picture of their users. But many financial institutions struggle to use data appropriately because they lack internal resources and tools. External partners offer cost-effective data storage solutions, as well as data intelligence capabilities that minimize the need for these internal resources.

Financial institutions without large internal teams can also take advantage of newer, highly intuitive tools that can help them use data to better understand users’ digital activities. Capturing how businesses and consumers are navigating digitally can enable banks and credit unions to identify areas where users are abandoning processes or exiting a solution. This can inform changes that reduce friction and help institutions provide guidance proactively.

With the right data intelligence tools, institutions can also find correlations and insights that aren’t otherwise apparent. An institution could use data about a consumer’s financial history and transactions to flag potential identify theft. Properly analyzing data will also allow banks and credit unions to present more tailored, meaningful offers to clients.

Offering a state-of-the-art mobile app should be a top priority for all financial institutions in a climate that is increasingly mobile-first. For community and regional institutions facing competition from larger, national and digital-only brands, a modern app that provides an intuitive experience is especially critical when building brand loyalty.

Jennifer Dimenna is SVP, product, at Apiture.

We explore the current state of mobile banking—including the quest to improve the day-to-day user experience and protect customers from fraud—in the BAI Executive Report, “Building on mobile banking’s success.”