Three Top Trends in Mobile Banking: What You Need to Know

mobile-banking-6-21-17.pngIt comes as no surprise that today’s banks need mobile solutions to stand a chance of satisfying their customers. You’ve probably heard of the Big 5 of mobile banking, the essential features that are now an absolute must-have for the modern customer, including: the ability to transfer funds between accounts, pay bills, make deposits, locate ATMs and branches and conduct peer-to-peer payments.

These essentials are an excellent starting point for banks developing mobile solutions. However, the truth of the matter is that the basics are no longer enough. Any bank that has entered the 21st century provides their customers these capabilities. In order to differentiate their products, drive profits and keep their customers satisfied, modern banks must find ways to use mobile to offer customers more value and convenience and be more relevant to their daily lives.

Many of the largest banks have already realized this and have been working diligently to develop creative new solutions. Perhaps that’s a large part of why these banks have managed to pull ahead of community banks in customer satisfaction rates, a surprising development considering that community banks are commonly thought to have the personal touch.

However, who’s really owning the mobile banking space are companies that aren’t banks at all. Apps like Venmo have taken the mobile banking world by storm and are edging banks out of their rightful place as financial service providers. To stay on top of the latest mobile banking trends, banks should keep an eye on three larger mobile trends and follow suit with their own offerings.

So, what’s the latest?

No. 1: Intuitive Interfacing
The banks who have been most successful with their mobile banking have found ways to make the experience as intuitive for their customers as possible. One of the ways they’ve done this is through eliminating complicated menus and interfacing mobile capabilities into the features that customers are already familiar with.

For example, customers can now use their smartphones’ voice control to request and make payments from PayPal’s Venmo, one of the most popular peer-to-peer payments apps. Users don’t have to navigate the app—or even directly use it—to transfer money between friends. Instead, they can simply instruct their phone and their payments are taken care of.

To ensure their mobile offerings are attractive, banks should first and foremost make sure they’re easy-to-use and provide customers with a seamless experience they don’t have to think about twice.

No. 2: Artificial Intelligence
Voice-activated devices like Amazon’s Alexa have recently introduced artificial intelligence into the mainstream. Banks on the cutting edge have already recognized this technology’s potential to provide an enhanced customer experience that offers more value and have begun capitalizing on it.

Perhaps the best example of this is Erica, Bank of America’s soon-to-be-released chatbot, which can now go beyond the Big 5 basics to impart personalized advice on customers’ finances.

Companies outside of financial services are finding creative ways to utilize artificial intelligence as well. One interesting example is the app Digit, which helps the user build savings by connecting to his or her checking account and automatically making transfers to an FDIC-insured savings account based on income and spending activity. Users no longer need to think about practicing better financial habits; instead; they have an algorithm to do it for them.

No. 3: The Subscription-Based Model
Subscription-based services like Spotify, Netflix and Amazon Prime are influencing purchase trends and consumers’ expectations of the companies they work with, including their banks. These fee-based services offer value at an affordable price and can easily be controlled and customized based on the user’s need.

Also interesting to note is that a recent survey indicated access to discounts as a primary impetus for customers to not switch from their current bank. Money-saving deals can promote better fiscal health and allow customers to save more than they’re able to make in today’s interest rate environment. Plus, the bank is at the point of sale whenever consumers make a purchase.

The payment models utilized by services such as Amazon can clue banks in to how they should structure their own mobile offerings. And in fact, the top six banks have all been developing their own rewards-based shopping programs, which may be part of the reason why they’ve managed to pull ahead in customer satisfaction.

These are just a few of many mobile trends that are currently all the rage in banking. But it’s important to remember that mobile is ever-evolving, and today’s trends won’t be tomorrow’s. Banks must be ever-vigilant about observing what’s happening in the mobile space and think about ways they can keep innovating their own offerings to stand apart from the crowd and make sure their products and services please their customers.

Unlocking Smartphone Secrets

mobile-apps-9-4-15.pngSoon, your bank may know more about you than you could imagine. Bank Director recently spoke with Stephen Burke, chief operating officer for Context360, a startup firm in San Mateo, California. Context360 uses a smartphone’s sensors to track user location and behavior, including what other apps the person is using on the phone and when. There are a variety of potential fraud and marketing applications for the technology. San Francisco-based Wells Fargo & Co. earlier this year awarded the company seed money to develop its platform for potential banking uses.

Tell me what Context360 does.
We started out three years ago focused on game developers trying to solve the problem called retention and engagement. Unlike the web, where web sites know where you came from and where you went [by] using cookies and various devices, apps are very much siloed. You don’t know where [users] came from when they open your app or where they go when they close your app. What if we could provide insights into what users do outside your app?

How does it work?
All smartphones have sensors. Once it’s installed and the user has accepted the permissions, it runs in the background. It collects changes in the phone’s state, like the phone moving, or logging in. If you open your mail app, that gets registered. Our license terms explicitly require our customers to get informed consent from the end users. I want to be very clear. We don’t have your contact lists, email content and we are not looking at SMS [text message] content. We just know that someone is spending two hours per day texting, but we don’t know the content of those texts.

I understand that Wells Fargo is interested in this as a way to prevent fraud, by knowing the customer’s location through the sensor in their smartphone and comparing that to where the credit card is being used, for example.
If you use the United app in the last few hours, that is a good indication that you might be traveling soon. We don’t know if it’s you. We know it’s your phone. If you have opted in to be directly recognized, if you are traveling a lot, you may opt to link your bank user profile with your smartphone profile.

So the bank app would know that I was doing something in an airline app, or that I had downloaded a boarding pass, so they don’t have to block my credit card when I travel to that city?
Yup. Or you could check into the Four Seasons hotel in London and because your phone is logged into the wifi there, we know it’s you. At the end of the day, your phone is you. It is the single most ubiquitous personal device ever. Similarly, if you travel back and your credit card continues to be used in London but your phone is in Tennessee, that’s a signal those charges should be blocked. We are in the middle of three weeks of testing for another use case, which is lead generation or cross selling. The example here is you suddenly have an interest in real estate apps such as Trulia or Zillow, and that’s a sign you might be in the market for a house. If I’m Wells Fargo, I have a new loan rate and I have 6,000 people in Tennessee who have been looking for real estate, so why don’t I send them a message right now that they should come in and talk to a loan officer now?

As a user, do you know what I’m searching for on the web?
No. We see the broad category, such as she just downloaded an app. But we don’t see what you’re searching for on the web.

But Wells Fargo is not actually using this with customers yet?
It is only being done with Wells Fargo employees in a trial. We’ve raised about $1 million to date including the seed funding from Wells Fargo. We have several other clients using our software and about 7 million active users on our platform right now, ranging from real estate apps, retail, to voice over IP and banking. We have about six game developers in the U.S. using it. We are in discussions with a large bank in the U.K. to do something similar to what we’re doing with Wells Fargo.