By Satya Swarup Das, senior solution architect, Virtusa
The last six years has seen the number of mobile banking customers triple while traditional channels are starting to die off. This is unsurprising since, as a society, we’re increasingly connected to our devices. However, despite the clear demand for mobile-first banking, most banks haven’t embraced the opportunity. Instead they have simply adapted existing applications onto a mobile platform or use it to direct customers to other channels. This outdated approach fails to capture the potential of mobile as a way of providing customers with first class end to end service for everything from on-boarding to credit lending and is a key reason why traditional players are losing customers to innovative fintech start ups.
Gone are the days when banks could get away with a mobile app that only offers a few basic services. The contemporary approach must be personalised and customer-centric, rather than generic and product-centric. There are three key aspects of a modern mobile banking experience: user experience; hyper personalisation; and new age features.
Above all, the mobile banking experience should be convenient and quick. If customers want a loan, they want an instant credit decision. Yet all too often shortcomings cause frustration for customers. Many cannot get instant decisions even after entering a lot of data due to the bank’s inability to process information immediately. This means that customers abandon the mobile channel only to end up repeating the same information to a customer service representative. Banks need to ensure they eliminate such friction points in the customer journey to provide a seamless process from start to finish.
The next step is personalising the mobile banking experience. Each customer should be able to choose exactly what they see and what they do in their app. Banks need to apply machine learning techniques to apps so they can better understand how mobile banking is being used, improve the ways they target individual customers, and offer superior customisation options. In particular, when it comes to designing proactive product offerings and pricings, it’s critical to understanding the lifestyle of each customer. By actively considering all relevant data points, weighing them appropriately and deploying machine learning techniques, banks can build model that accurately predict each customer’s likes and dislikes.
New age features
The golden rule of mobile banking is that features which make life easier or simpler for the customer are going to win out. Many of these are relatively straightforward, such as being able to scan documents or automatically verify and onboard a new customer, but are very effective at improving customer acquisition. The best place for banks to start is by transforming paper-intensive complex processes, such as those related to loan products, into quick, automated processes.
Faster credit decision making, instant payment options, and integration with third party vendor services are basic ways to enrich mobile banking offerings. Other possible additions could include QR code-based sanction letters, smartwatch integration, Internet of Things (IoT)-based device integration to track customer activities, a digital wallet for insurance documents, smart reminders for repayment or premium payment due dates, and so on. Even better, these sorts of upgrades will also gather data points about the customers, so that more personalised and relevant options can be presented to them.
Hurdling banking barriers
While technological advancement has brought enormous opportunity for banks to make their mobile banking offerings stand out for their customers, there also exist challenges that need to be addressed. First off is the issue of consent. Machine learning will only be possible if customers allow their data to be used for such purposes, an issue which has only become more relevant with the recent GDPR regulations coming into effect. Banks need to be crystal clear on what data they have and which purposes they can use it for before attempting to launch any improved mobile banking services.
On top of that, there are basic usability questions that need to be tackled, particularly around the devices people have. As banks push more functionality onto mobile banking, the applications will require constant upgrades. This could mean that users with basic or outdated devices may have a worse experience, or even be unable to use the app entirely. Banks need to consider the optimal number of features to include and the average profile of their users to ensure that increased functionality doesn’t come at the cost of reduced speed.
Despite these challenges, mobile banking is not an area that can be ignored. Banks need to make sure they’re keeping up with every innovation in the field, from smart wallets and gamification, to image scanning and voice-based commands, in order to meet customer expectations. It’s a demanding ask and requires constant evolution, but those banks that have a proper understanding of the service landscape, customer priorities and technical capabilities will thrive in the digital first era.