Why a Multi-App Strategy Is Needed for a Multi-Generational Customer Base

For most consumers, mobile has become the primary delivery channel for interacting with their financial institutions. As a result, community bankers devote a great deal of time and resources toward the development and delivery of their digital banking experience. While the intent is correct, the strategy is often flawed.

Many bankers now subscribe to the concept of the super app, or a single application that bundles all a bank’s services, along with those of its fintech partners, within a single mobile application. The perceived benefit is that if a bank’s customers can manage everything from basic transactions to wealth management and financial wellness, to consumer lending and even business banking, then it should be more convenient for both the customer and the institution.

The reality, however, is that a super app approach really only works if the bank is serving a very homogenized customer base (e.g., predominately retirees, or a certain profession, like farmers). In most cases, a community bank’s customer base is much more diverse, and therein lies the issue.

The super app mindset means that when any new services are successfully deployed, it bloats the application and ultimately dulls the customer experience, making it more difficult for users to find and use the service that the bank worked so hard to integrate.

Digital banks are frequently cited for their design and usability, and indeed, 47% of new checking accounts were opened through digital banks in the first half of 2023. But their elegance is not a matter of artistic design as much as it is about strategic deletion – in essence, having leaner, more focused digital applications catered to serve individual consumers rather than a cumbersome single app experience.

Elon Musk famously said, “Possibly the most common error of a smart engineer is to optimize a thing that should not exist.” Rather than designing focused mobile applications, many bankers continue to insist that the only option is to keep adding services or functions for all customers, regardless of their unique needs. Digital banks are attracting Millennials and Gen-Z customers and gaining ground on community banks through addition by subtraction, by providing limited and targeted functionality specific to their targeted demographic – not their grandparents.

Rather than try to boil the ocean within a super app environment, many bankers are realizing higher levels of customer engagement and better digital experiences for their customers through either a companion app or a multiple app strategy.

In distinguishing the two, a companion application is a secondary application that does not include traditional banking services, but rather, provides only supporting services such as debit/credit card controls, budgeting, p2p payments or financial education. In a multi-app strategy, each persona has an available application designed for them and each app includes the full suite of traditional banking services, such as account balances, transactions, transfers, remote deposit capture and bill pay, as well as specifically designated services for that persona.

For years, community bankers have used personas to design improved products and create a better understanding of the needs of their customers and target markets. Why would the use of those personas end at the digital channel? A multi-app approach enables banks to deploy mobile experiences specifically designed for the profile and needs of each customer banking with their institution. It can take generational preferences into account and still provide the customer with the ability to choose the application/configuration that is right for them. Invariably, when their needs change over time, they could then personalize those configurations by including additional services that further meet their needs and match their unique experience.

By focusing on the services that their customers are most likely to need, designs can become more streamlined, improving usage of digital services instead of the more costly human-powered, back-office service centers. This also provides the bank with a way to test new ideas within a targeted scale to see if its customers respond positively. If so, the bank can then focus on rolling out that new service or feature more broadly.

A multi-app and/or a companion app strategy acknowledges that different customers do in fact have different needs. By delivering solutions built around those needs, bankers can drive both customer engagement and claim a larger percentage of wallet share over time.

Kris Kovacs