One of banking’s clearest trends is the growing adoption of the mobile channel across all age groups that started more than a decade ago, but accelerated during the pandemic.
BAI’s 2023 Banking Outlook research puts numbers around the trend: Usage-wise, mobile (21%) is the second-most preferred customer channel across all demographics, trailing only the branch (24%). But when it comes to the number of monthly interactions, mobile far outdistances the other channels—and this is as true for the baby boomers as it is for those in Generation Z. And an increasing percentage of each generation is willing to switch banks for a better mobile experience.
In the latest BAI Executive Report, we explore the current state of mobile banking—this includes the quest to improve the delight factor in the day-to-day user experience along with the resolute effort to protect that experience from the clever and aggressive strategies being developed by fraudsters to target mobile users.
Our lead article from contributing writer Edmund Lawler centers on what banking institutions of all sizes are doing to enhance the features and functionality of their mobile apps. As one banker puts it, “The mobile app is definitely something people look at when they are considering a bank – they want to see what features and functions are offered and what they can do.”
Lawler also checks in on where things stand with the so-called “super app” – a solution envisioned as a one-stop shop for not only all things financial, but also for travel, hotels, dining and other lifestyle experiences.
Contributing writer Katie Kuehner-Hebert digs into fraud protection as it relates to mobile banking. As mobile increasingly becomes the channel of choice, so too does it become a bigger target for scammers and fraudsters that are highly skilled and well-provisioned.
One of the industry’s Holy Grails is real-time payments and transfers from mobile devices, but once the money is gone to a fraudster, it tends to be gone for good. This leaves a shrinking margin of error in protecting these customers, and at the same time, keeping the customer experience enjoyable.
For this month’s Executive Report Q&A, I speak with Abhinav Gokari from Yabx Technologies, a Netherlands-based fintech upstart that is combining mobile phone reach and alternative data to expand lending services in the developing world. Yabx was a finalist in the 2022 BAI Global Innovation Awards on the strength of its lending solution aimed at broadening financial inclusion in Africa, Asia and Latin America.
Yabx employs mobile-wallet transaction data and telecom data to create algorithms that are used to gauge a potential borrower’s creditworthiness. Data is sourced via partnerships with telecom providers, wallet networks, banks, merchants and others. And because many of the underserved in these regions are new to banking products, Yabx also provides credit-related education to its customers.
Jennifer Dimenna from Apiture addresses the growing number of converts to mobile banking across all ages and demographics in her article. It’s no surprise, of course, that the younger generations are leading the way, but those who grew up in analog times are increasingly heavy users.
This rising level of mobile engagement presents banks and credit unions with ever more touch points through which they can strengthen users’ trust and build deeper loyalty. Dimenna focuses on smaller banking institutions in suggesting several must-do steps to take, starting with modernizing their mobile app and synchronizing the features available mobile and online for continuity. Also critical, she says, to be able to seamlessly get a customer from the mobile channel to human help with necessary.
In his article, Jeff Chen from Alkami starts from the position that too many banking institutions don’t consider improvements to their mobile and online offerings from a strategic perspective. This, he says, is a big contributor to the challenges they face when competing against deep-pocket money centers and digital-native neobanks.
Chen suggests five ways that banks can enhance their digital customer experience, beginning with making sought-after information like credit scores and upcoming payments more visible on the mobile device. Personalized messaging and product offers are also avenues to greater engagement, he says. The approach overall is about optimizing the user experience: “A banking platform’s UX and functionality are the top distinguishing factors between a financial institution that’s ‘just good enough’ and one that’s the ideal FI.”
Terry Badger, CFA, is the managing editor at BAI.
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.”
