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Mobile on the move: Creating a more versatile banking channel

Some banks think that after 10 years, they’ve got mobile banking all figured out. To which some customers might well reply: Not. By. A. Longshot.

Millennials say that they’ll jump in a heartbeat to a bank that builds a better mobile banking app, and the competition is fierce to excel and improve. Want proof? BAI Banking Outlook findings show conclusively that 51 percent of millennials would switch banks for a better banking app. (That contrasts significantly with baby boomers, of whom only one in five would make the same move.)

So who’s emerged as a mobile success story and why?

“Conference and industry buzz have highlighted institutions like USAA with consistently high satisfaction ratings, or recently Umpqua Bank with its ‘BFF – Best Financial Friend’ chat,” says Ashley Miller, product manager for consumer mobile banking at CSI, a financial technology company.

“They’re bringing deeper human interactions into digital,” Miller stresses, “with designated bankers building relationships through chat.”

Other successes involve what Chet Kamat, senior vice president of banking at Oracle Financial Services, calls “a fundamental shift in the business model,” based on Oracle’s experience in servicing more than 600 customers in 140 countries over two decades.

He says banks are learning to blend customer journeys: instead of thinking of a stand-alone banking customer on mobile, banks now embrace a new paradigm. In it, the customer’s two journeys—buying a TV, for example, and finding financing for it—are blended. While banks might regard those as apples and oranges, consumers put them in the very same fruit basket.

“As I open the store’s app for in-store promotions, why can’t I see the promotional offers from the bank in the app itself and in just one click pick my TV with a great financing option?” he asks rhetorically. “This blending of customer journeys across time, locations, events and moments is the next evolution of mobile banking.”

Along the way, there have been some big fails. Specific to mobile, Miller says security and fraud monitoring gaps have hurt mobile banking perceptions, as well as poor performance of online banking apps—and early decisions to build only for iOS or Android.

Just a quick skip through the Twitter stream of @RevolutApp, from the online bank Revolut, will show some other spectacular challenges, in performance as well as customer service.

“I can’t get on 2 the app coz it says my card is blocked for security reasons,” one account holder tweeted. “I am in another country with no money as it’s all on my card. Please help as support does not answer. I have a 6 year old with me on holiday and I don’t even have money for food. This is so urgent please.”

“The biggest fail in mobile banking is that financial institutions are being too insular,” said Matt Johnner, president and co-founder of BankLabs, a national provider of mobile technology for banks and credit unions. “For instance, a mobile banking app should not require all participants to be customers of the same financial institution in order to use the app. Mobile banking must be bank-agnostic in order to be effective.”

There will always be “oops” moments, Kamat notes. “We have seen a large share of experiments that did not work. The key is not to call out what didn’t work, but what has been learnt over these two decades.”

He adds: “To me the takeaways are that the best banks aren’t shy to experiment with new ideas. They keep pushing the envelope they keep their ears open to the voice of the customer.”

He cites how one of Oracle’s first innovators offered SMS-based banking almost within a year of the advent of mobile telephony in India. Another created a joint venture with a large telecom operator in Japan to create Jibun Bank, the world’s first mobile only bank.

One big sticking point for many banks has been allowing consumers to open an account completely online via mobile. The challenges are well known. A recent study found that as many as 90 percent of customers abandon online account-opening processes.

Insofar as loans via mobile, Kamat says: “The key is not just the ease of application capture but having the digital backbone for originations, validations, credit checks and product processing to be able to fulfill the request. That’s where leading banks excel.”

“Digital onboarding—including mobile account opening — is becoming more pervasive,” adds Mark Trousdale, executive vice president and CMO of InvestCloud.

“I think there was, for a while, a perception that regulatory hurdles would get in the way of digital account opening,” Trousdale says. “But that’s not the case. In reality, the biggest sticking point for banks has been finding the right technology: one that allows customization of workflows to fit the account opening requirements and desired functionality of the specific bank—and enables a user experience that reflects the bank’s brand.”

What’s the best advice for banks looking to improve their mobile strategies?

Trousdale recommends putting an excellent digital experience on mobile at the top of the list and getting there via good design.

“Banks shouldn’t try to build everything themselves,” he contends. “Delivering technology effectively is rarely a core competency of banks, even if they have great tech talent. Partnering with the right digital platform provider that’s flexible and modular is the best approach because it can yield all the same control as in-house builds but at a fraction of the time and cost.”

Kamat says banks need to move quickly on open banking.

“There is a strong demand among today’s technologically savvy customers for new and improved banking services and experiences,” he says. “The good news is with an open banking platform, banks have the opportunity to provide highly personalized, truly engaging products and services.”

By leveraging applications program interfaces (APIs) that act as connectors between the bank and other service providers, Kamat says, “Banks can rapidly assemble, enable and digitize services. For example, banking APIs connected to an auto trading or real estate portal can enable end customers to understand their credit worthiness and shortlist vehicles or property on the go—instead of calling their bank or checking the bank website.”

Johnner of BankLabs suggests that banks “must shift their focus from the individual consumer to the commercial consumer. Small and medium-sized businesses should be able to easily create loans, request financing, etc.”

While pointing out that mobile logins outpace online logins for many banks, Miller recommends that banks focus on the experience more than uniquely mobile strategies. “Personalize, respond, engage,” she says, “keeping in mind that the mindset shift ‘from mobile first to customer first’ is useful going forward.”

Digital onboarding is key, she added, but banks must remember that digital can mean friction. In working out a mobile strategy, she concludes: “Don’t make digital all self-serve and distance yourself more from the actual needs of the customer.”

So looking just a few years ahead, will financial institutions have mobile banking all figured out? Again: Not. By. A. Longshot. But there is a caveat: They can win if they figure out their customers first.

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Jeanne Pinder is the founder of ClearHealthCosts.com, an award-winning startup bringing transparency to the health care marketplace.