Mobile Movement: Financial Institutions Look to Ride The Rising Wave of Mobile Banking Users

Mobile Phone Engagement

Editor's note: As users continue to utilize mobile for their banking needs, financial institutions must position their mobile platforms to maximize consumer engagement.

Consumers are doing more of their banking via mobile phone than ever before. The popularity of mobile banking apps should overtake online banking usage by 2019, according to a report by IT solutions and services firm CACI.  Even though this trend will not eliminate the use of online banking by consumers, there are demographic forces at work that are causing financial institutions to focus on strategies that create competitive advantages for them in the mobile banking space.

 For example, Millennials lead the way in mobile banking adoption, 47 percent compared to 23 percent for Baby Boomers, according to Jumio and Javelin Research’s survey of 2,000 U.S.-based banking customers.  In addition, rural and coast towns will see the large increases in mobile banking users between now and 2023 due to the lack of internet access and broadband services in those settings according to the CACI report.

 Any digital engagement that presents the consumer with a “wrong place, wrong time” experience is a uniquely toxic type of friction that leads to a high increase in abandonment that will impact customer attraction and retention. Nearly a third of mobile users who quit one banking activity quit the FI to open an account at a competitor, file a complaint and/or share the negative experience with a family or friend, according to Jumio and Javelin Research’s “Banking Across Generations” study. In fact, the most common complaints by mobile banking users surveyed were the process took too long (36 percent) or they could not remember their password (28 percent).

 In addition, the consumers often do not know what they need or want until they experience it.  This makes understanding when and how long a digital banking user engages mandatory.  The best product, service and advice a bank or credit card can offer stands no chance if promoted to mobile banking consumers that are in no position to consider it.  For example, D3’s research shows that mobile banking activity peaks in the morning as people commuting to work check recent transactions and balances.  At that time, presenting the consumer with even the most relevant, valuable offer requiring more than the push of a button it is dead on arrival.  Instead, present that offer on Thursday or Saturday evenings when data shows users are more likely to be performing various money management duties, such as paying bills, checking future cash flow, etc. This will improve success because consumers are engaging for minutes rather than seconds during those times. 

According to Jumio and Javelin Research, 40 percent of Americans have not set foot inside a bank in the last six months. CACI reported that consumer visits to retail bank branches are set to drop 36 percent between 2017 and 2022, while mobile transactions rise 121 percent in the same period. The numbers don’t lie: the banks and credit unions that will enjoy success as future chapters of the digital revolution unroll will be required to do more than insure their UIs are simple and intuitive.  To just stay in the game and, thereby, have a chance to win a share of the pot, institutions must understand the when, how and how long of digital engagement as well.