Jouk Pleiter, CEO, Backbase
The fast growth in smartphone usage by consumers has led banks to realise they can no longer ignore the volume and value of transactions being conducted via mobile.
Mobile is becoming the preferred way for customers to engage with banks and represents the fastest-growing sales channel. With mobile becoming an increasingly significant part of the revenue mix, banks will need to develop a solid mobile strategy if they wish to retain their customers and take full advantage of this opportunity.
Part of making the most of mobile is to understand where it sits in the overall customer experience – what customers use it for, how this usage has changed in recent years and how it will continue to change. But there also needs to be a recognition of the fact that mobile will not replace all of the existing banking functions provided by internet banking, call centres and branches – rather, it will continue to augment these functions in an increasingly sophisticated way.
Advertising for mobile-focused banking products and apps is gradually becoming more noticeable everywhere we go. New ‘challenger’ banks are springing up shouting about the fact that they are building their services around the mobile device. However, there seems to be a lot of marketing spend still being pushed at online – not mobile – but if the banks look at their analytics platform, they should be able to see that the majority of traffic is in the mobile channel.
Banks will need to understand consumer attitudes and deploy the right technology capabilities to the right context in order to leverage their marketing efforts. Below, will discuss the various steps banks can take in order to achieve an effective mobile strategy and optimise their omni-channel banking.
The future is not just mobile
When you consider just how ubiquitous the smartphone is – and how advanced the capabilities of iOS and Android are – it’s no surprise how important these devices are to the future of banking.
The rise of the mobile channel in banking reflects these high levels of smartphone ownership. A study conducted by Backbase in 2016of more than 160 C-Level bankers worldwide found that over 70% of banks have the intention in 2017 of allocating medium to large investments towards developing mobile app and features, with an additional 40% investing in mobile wallets. By 2020, the mobile channel will be the biggest revenue generator for banks – greatly impacting the role of online and customer call centres.
Numbers presented by ABN AMRO showed that mobile customers contacted their bank 11 times more often than customers using other channels – this level of engagement is staggering and illustrates the size of the opportunity for banks.
But to say that customers are using the mobile channel more and that this trend will continue in the future isn’t exactly a surprising or helpful insight for banks. What they need to understand is how customers are using their mobile channel and what kinds of new functions these customers would like to see in the mobile channel.
However, a Google study in 2013 showed that product research that begins on a smartphone usually leads to purchases made through other channels. Around 37% will make the purchase via a laptop or desktop computer, while 32% will go on to make the purchase from a physical store. So what should they be doing to make the most of it?
Don’t fake it
One of the biggest mistakes many banks make with regards to their omni-channel strategy is ‘faking’ the experience by focusing on creating identical apps and websites for different devices. This fails to take into account that user behaviour depends on the device being used – people use their smartphone to do different things than they do on their laptop or tablet and vice versa.
Banks shouldn’t build a smartphone-optimised version of their internet banking platform. Instead, they need to build an app that lets the customer carry out simple transactions quickly and easily in situations where they are likely to be in a hurry and require convenience above all else.
ABN AMRO showed that by February 2012 the number of mobile logins for its services outnumbered the amount of online logins – by May 2013, there were twice the number of mobile logins than online logins. While we know that customers are on mobile, banks should be ensuring that they are reflecting this in their marketing efforts. The most successful campaigns are the ones that are seen by the right customer at the right time. Mobile presents huge marketing opportunities and banks need to ensure that their campaign spend and strategies reflect this.
Optimise for omni-channel
The first step in a successful omni-channel banking strategy is to recognise that there are several different use cases for banking services, and this will be reflected in the device the customer uses to do this. Some customers may want to do something simple quickly using their smartphone, others might want to do some casual research while on the sofa at home watching TV – for this they might use their tablet. For more focused activities, such as planning their budget for the next month, they may use a laptop or desktop PC. With more advice-based tasks, such as applying for a loan, they will favour face-to-face interaction within a branch.
Banks need to have one unified platform delivered through multiple channels in such a way that the customer always knows exactly what is going on and has complete confidence that the bank does too. Achieving this isn’t simple, but meeting consumers’ increasingly high expectations of what a good experience entails is vital. While legacy IT systems make this an expensive and complex challenge for established banks, it is something banks should be addressing as a matter of priority.
Link the channels
An easy-to-use, personal and functional app can really help to set a bank apart from its competitors and will keep existing customers happy while attracting new ones too. However, it is important to keep the omni-channel goal in focus – mobile is one tool for customers to do their banking, but not the only one. So to create a successful omni-channel banking strategy, the cross-channel journey must be seamless. Take, for example, how a user might make a mortgage application. They could check out the interest and repayment rates on their smartphone, but take this process further and actually make an application on their laptop or desktop PC. Or they could ring the call centre for more information.
What is key to understand here is that the customer doesn’t want to feel like he or she is back to square one when they switch device or channel. They want to pick up where they left off, not have to fill in or recount all of their information again. Exchanging the information, processes and data between different applications and making the switch between channels should be seamless and intuitive for the customer. This will significantly increase the chance of making a sale, as well as promoting loyalty in a customer who is impressed by this superior omni-channel experience.
It is clear to see that the rise in technology and smart devices has significantly impacted how banks are bringing much more convenience and speed to the customer’s fingertips. However this has also caused many challenges that banks need to address if they do not want to lose out. The future of banking is not just about mobile, it’s omnichannel. In today’s digital world, if banks wish to remain relevant they will need to focus their efforts on providing a greater user banking experience for their customers and reflect this across multiple channels – and unfortunately those who have yet to realise this, may be at high risk of becoming obsolete.