The keys to delivering excellent mobile financial services

IBM

In this increasingly connected world, providing mobile financial services is a must-have for financial institutions. For 56 percent of consumers in the UK, mobile banking services were used more than once a month in 2016. Some apps lead the pack with user experience and popularity while some aren’t up to par. Interestingly, according to MagnifyMoney, credit unions and small US banks have better-ranked mobile apps than their large counterparts.

Profusion of fintech startups

Banks and financial institutions can look to fintechs for some guidance as to where they should be focusing their efforts in developing and improving their mobile financial services apps. These mobile fintechs operate in the seven following main areas:

1. Payments

  • Point-of-sale for mobile devices or tablets (Square and iZettle)
  • Mobile wallets facilitating payments in specific industries (TabbedOut and MyCheck) or across industries (Dwolla, LevelUp and Monitise)
  • Money transfer and remittance services (Venmo, MoneyGram, TransferWise and WorldRemit)
  • Check remote deposit (Mitek and Ingo Money)
  • Bill payment and business expense (Expensify and Abacus)

2. Account information

  • Enhanced banking services through partnership with banks (Simple and Moven)
  • Tracking and management of personal finances (Tink and BillGuard)

3. Savings

  • Periodic micro savings (Acorns, Digit and Qapital)

4. Investing

  • Monitoring and portfolio management (Robinhood and Wealthfront)

5. Lending

  • Apply for a loan and check the status of a loan (Lenny and CUneXus)
  • Micro-lending (Affirm and Seeds)

6. Mobile-first banks

  • Innovative firms offering a full range of banking services with a banking license (Number26 and Starling Bank)

7. Insurance

  • Receive insurance quotes and purchase insurance services (Trov and ZhongAn)
  • Micro-insurance (Bima and MicroEnsure)

How to design mobile banking services

The first step is to develop a deep understanding of how customers consume mobile financial services. Here are the results of a survey by Google: Bar graph showing the percentage of people surveyed who completed certain finance activities. 87% checked account status and purchase history, 55% made a payment to a business (including household bills), amongst others

Image source: Nick van der Meij

The keys to providing exceptional customer experience in mobile financial services are to ensure:

  • Simplicity of use
  • Personalization
  • Convenience (versus calling or going to the branch)
  • Availability (always on)
  • Security

It’s challenging to be the best at all these dimensions at the same time. Providing the best customer experience requires an awareness of the trade-offs to make conscious design choices.

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For instance, frequency of use is a key parameter that is often overlooked in the design choices. There should be a clear distinction between services you use every day compared to the services you only need on an exceptional basis.

Think about it: how often do you use your insurance app? Ideally, you would never use it. However, you want to be able to use it when you need to file a claim or get assistance. Similarly, how often do you get a new loan?

On the other hand, everyone wants to use convenient means of payment every day. If you’re a trader or investor, you want to get market insights and trade every day. Otherwise, you probably don’t care and just want to check your retirement plan once a year or so.

Another issue is the ability to aggregate different services on one single platform. Having to check on 10 different apps on your phone kills the convenience of each of them. A good example is WeChat in China, which has become a single platform through which users can access and pay for many services, such as finance and e-commerce.

Next steps

In the next wave of mobile banking services, firms are currently exploring new technologies to improve their mobile offerings and customer experience, such as the following:

  • Biometric authentication (MasterCard’s “selfie” payment)
  • Voice technology (Enacomm and Eva)
  • “Intelligent” virtual assistants and chatbots (Bank of America’s Erica)

To differentiate, firms must perform the basics of mobile account and transaction management and then go one step further into simplicity and convenience for their customers.

Written By

Sebastien Meunier

Head of Digital for North America at Chappuis Halder & Co.

Sebastien Meunier is an expert in Innovation in Finance, with 15 years of experience in managing business and technology transformations in Financial Services, and among the top 10 Fintech influencers on social media.