The opportunity for banks with digital apps

- By Collaborative Media & Publishing
As banks’ retail product offerings, such as loan rates and credit cards, become more similar, digital banking apps will become increasingly important to attract and engage customers, analysts say.
 
“The line between various different offers is very fine, whether that's your loan interest rate or your deposit interest rate,” says Brad Milliken, lead partner, digital platforms at Deloitte.
 
“So, you have to provide an internet banking and mobile banking experience which is easy to use and quick and seamless. If you don't do that then it's problematic.”
 
At the same time, mobile banking apps will grow in importance as they overtake internet banking as the primary way for consumers to access financial services.
 
It’s a process already well underway in Central Europe, says Milliken.
 
Customers there were initially reluctant to use mobile banking because they felt they were only receiving a subset of the information and features available to them, but that perception has shifted and consumers expect apps to provide access to all the same functions they are used to online.
 
Technology research company Forrester sees banking apps as a way for banks to build loyalty.

“Australian banks really need to use mobile banking to make customers feel confident about their finances and evoke the positive emotions that drive loyalty,” The Forrester Banking Wave: Australian Mobile Apps report stated.
 
“Most banks still have a way to go to evoke positive emotions and build trust through effective self-service and helping customers manage their money.”
 
The report stated that digital touchpoints are crucial to customers’ overall experience.
 
“As mobile banking becomes increasingly popular among Australian customers for many common banking tasks, banks that excel in delivering helpful functionality that is easy to find and use can expect their mobile apps to act as a differentiator to retain existing customers and attract new ones.”
Balance checking and bill paying still top uses
While digital banking apps are viewed as an engagement tool, Deloitte’s Milliken questions whether judging success by time spent “engaging” with the app is an effective measure. Consumers are looking for more of a set-and-forget experience, not to spend more time on the app, he says.
 
Milliken says the first step in building an effective banking app is to ensure the basic features are easy to use and easy to find, because this is what the majority of users are looking for. In fact, checking account balances and paying bills or transferring funds to another person accounts for 95% of customers’ mobile banking use.
 
The remaining 5% of uses is the chance for banks to differentiate the customer experience by providing additional services which are both accessible and functional, such as enriched transaction information and personal financial management functions, such as spend tracking. Other features might include bill splitting or share trading direct from the banking app, says Milliken.
 
Mallika Potluri, senior product manager, channels at Australian payments and financial software company Cuscal, says the introduction of open banking will lead to more functionality of mobile banking apps. Open banking requires financial institutions to share individual customer data with other institutions or apps if the customer requests it, for instance for the purpose of price comparisons or analysis.
 
Mobile banking apps will consolidate a customer’s financial details from different institutions to help them get a consolidated view of their finances. “Banking shouldn’t be seen as an isolated task. It can be integrated with a customer’s overall lifestyle,” she said.
 
The increased data will also allow for a more personalised service. Ultimately, says Potluri, engagement is driven by speed and simplicity.  “As long as the experience is very simple and intuitive, and any actions can be easily and quickly done, then you will be more engaged with your financial institution overall.”
 
This article represents the views and opinions of the author and do not necessarily reflect the opinions of BPAY. Published by BPAY Pty Ltd.  BPAY is offered by over 150 Financial Institutions. Contact your Financial Institution to see if it offers BPAY and to get the terms and conditions. This is general advice – before using BPAY please review the terms and conditions and consider whether BPAY is appropriate for your personal circumstances.

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