Going beyond the basics in mobile banking

This entry was posted on March 8, 2016, by Sona Sharma
mobilebanking

If there is an industry that understands the value of real-time mobile marketing, it’s the banking industry. Banks are seeing a huge increase in consumer adoption of mobile devices to access their financial information and to conduct various financial activities. This has led to mobile banking become a must-have offering for all financial institutions.

However, a successful mobile strategy for banks is now way beyond just the ability to have a great app with a great UI or the ability to check balances. It’s now more about offering the next-generation engagement that is driven more by customer needs and intent versus simple product push.

This requires banks to use sustained marketing efforts that cut across channels, are contextual and real-time, leading to increased customer engagement and customer success as well as fueling the necessary product use.

The Current State of Mobile Banking
The ubiquity of mobile devices in today’s financial services industry is undeniable. Some 39% of all mobile phone owners with a bank account have used mobile banking in the past 12 months, up from 33% in 2013 and 29% in 2012.i Not only are customers going increasingly mobile, research shows that those who use their bank’s mobile apps more frequently are happier with their banks and recommend it to othersii, something any business would vie for. To top it all, the ability to add and retain mobile bankers is vital to a financial institution’s growth and profitability. Consumers who use digital channels for banking generate higher fees than those who don’t. Furthermore, those who use mobile devices for their banking needs generate even higher fees than online bankers.iii

And last, but certainly not least, mobile banking also reduces service costs. Mobile transactions are the least costly to complete, at an average of just 10 cents per transaction. The potential cost savings from moving in-person transactions to the mobile device are significant, over an estimated $1.5 billion.iv

While the demand from consumers is there and the benefits of going mobile are clear, banks are still struggling to provide a seamless experience to their mobile users for functionalities that are in high use. For instance, consumers increasingly look for mobile deposit capabilities, yet only about 42% of financial institutions offered this option in 2013.v If customers’ demand for cutting-edge engagement and features is not met, there is a high likelihood of customers moving on to banks that do have those offerings. About 60% of smartphone or tablet owners who switched primary banks said the institution’s mobile banking capabilities were important or extremely important in the decision.vi

Next Generation Engagement is Real-Time and Event-Driven
In our opinion, it is time to move away from pure product push. Today’s customers want to interact with the bank when they want and how they want. They don’t take too kindly to being bombarded with information that is not relevant to them. Such marketing tactics no longer stick.

In order to better serve customers, we feel that it is time to bring in the concept of event-driven marketing to the mobile world. And then take it up another notch by making it real time. Event-driven marketing is more about interactions that are based on how the customer has historically interacted with the brand. How often do they engage with the brand? What are some of the common transactions that customer is involved in? Most financial institutions have an abundance of such data that they can use to customize their interactions with every customer. Once you have the contextual information, you can couple it with real-time signals from the app or the browser regarding the customer’s click stream or browsing pattern … what the user is doing in the app … to anticipate customer intent and offer up appropriate information.

Yet another factor critical for even-driven marketing is to understand and determine the best time to have these interactions. There is no point in giving information to a customer about completing their online or in-app profile when the customer has already addressed it. As Ajay Kelkar of Cequity says it aptly, “… instead of conducting a campaign based on the marketer’s sales objectives, an Event Driven approach is focused on the customer’s need and how that Bank can satisfy this.

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iConsumers and Mobile Financial Services, March 2015, Board of Governors of the Federal Reserve System
iiOptions and Opportunities: Forging Lasting Banking Relationships with Millennials, FICO, October 2014
iiiExceeding the Mobile Adoption Benchmark: Effective Strategies for Driving Greater Adoption and Usage, Fiserv, March 2014
ivLeveraging an Omnichannel Approach to Drive $1.5B in Mobile Banking Cost Savings, Javelin Strategy & Research
vState of Remote Deposit Capture: All About Mobile, Celent, January 2014
viMobile Financial Services Tracking Study, AlixPartners