By Mat Mehrotra, Chief Digital Officer, BMO Financial Group
Across industries, digital transformation continued to accelerate, fueled by changing customer expectations, new competitors and evident business opportunities. In banking, it’s no different – technology has transformed customers’ everyday financial lives.
Mobile banking is one of the first apps you’ll find on anyone’s phone. Managing your money has become as easy as picking up your phone and launching your bank’s app – in an instant you have balance information, statements, payment options and a range of other services to manage your finances.
And that’s just the beginning. The opportunity for financial institutions now is to go beyond “simple and digital” to help customers achieve real financial progress. This journey begins with a deep understanding of what clients need to improve their financial lives.
Unleash the potential of simplicity and digital
BMO constantly asks consumers what they think about a number of financial issues – from personal financial security and the economy to how they rate their current digital banking experience.
Our quarterly BMO Real Financial Progress Index revealed in May of this year that more than three-quarters of Americans and Canadians believe mobile and digital banking has made managing money much more convenient. Among respondents who say they are making financial progress, the figure jumps by almost 10%. This correlation represents a huge opportunity for banks: education.
For example, according to our survey, the top features that digital banking has made more convenient are fraud reporting, automated bill payment, and automated transfers. Think of the roughly 25% of people who said they don’t use mobile banking and don’t get any of these benefits.
Tools to help customers get ahead
Beyond day-to-day financial management, how many of us know that our mobile banking app offers tools that can really help us move forward? At a time when inflation is on the rise and many people are dealing with economic uncertainty, creating a budget is essential – and it’s something your mobile banking app probably provides for free. At BMO Harris Bank, our U.S. personal banking customers report that one of our most useful features is TotalLook, a tool that consolidates all of your financial accounts into one view to help you budget and to plan ahead.
Adoption is key to unlocking this potential, with the best results achieved at the intersection of human and digital – setting goals in one-on-one conversations with a banker complemented by digital tools to help achieve those goals .
A better way to reach underserved communities
In addition to mobile banking helping existing customers improve their financial lives, it is imperative that we also consider how digital can help marginalized communities improve their access to the financial system. A 2019 FDIC survey found that 7.1 million Americans were “unbanked,” meaning no one in the household had a checking or savings account at a bank or credit union. Around the same time, a study by the Federal Reserve found that smartphone ownership among the unbanked was just as high as among the fully banked.
Digital offers banks the opportunity to be creative in overcoming barriers to access in order to close the financial inclusion gap. No one with a smartphone should miss the opportunity to make real financial progress through simple, digital ways to manage their money. The challenge, of course, is persuading the unbanked to adopt – and how banks communicate that message is key.
Everyone can benefit from strategies to manage their money, increase their savings and improve their long-term wealth. Digital banking offers real potential to increase the participation of unbanked households in the financial mainstream through access to safe and reliable banking services through a device they almost certainly have in their pocket.
At the end of the line, mobile banking is already helping customers make real financial progress – and we’re just getting started. Driving adoption, evolving the experience and increasing access are clear focus areas for banks looking to help their customers improve their financial lives.