• Thu. Dec 1st, 2022

Mobile banking is growing past its pandemic peak

ByCindy J. Daddario

Mar 28, 2022

The banking industry has high expectations for the mobile channel, and it’s no wonder – according to several surveys, more than half of the US population already does at least some of their banking on their mobile device, and the chart Projecting future adoption is progressing rapidly. and to the right.

Of course, much of the trend is a response to COVID-19. In April 2020, Forbes reported that mobile usage had increased by more than 35% over the previous year, but this increase came from an already high base – a 2019 study by S&P Global found that half of those surveyed who had accessed their current account on a daily basis via a mobile app.

A recent BAI Banking Outlook study predicts that mobile banking will reach approximately 22% of channel usage over the next three years. The increase will be led by younger generations – Millennials and Gen Z – who average more than 100 banking interactions each month, with mobile being by far the preferred channel.

In this month’s BAI Executive Report, we take a look at the mobile banking experience as it stands now and where it could be headed in the years to come.

Our lead article by contributing writer Dawn Wotapka lists a long list of mobile solutions available to financial institutions, including cardless withdrawals at ATMs, the use of QR codes, voice-initiated payments, and banking features. features such as “buy now, pay later”.

On the other side of transactions, Apple plans to introduce features on the iPhone later this year that will allow merchants of all sizes to accept payments through digital wallets without a terminal or special hardware. An industry player suggests banks may want to add Apple’s functionality to their mobile apps to better serve small businesses.

Wotapka also enters into the build-buy-partner debate that seems to arise when banking institutions consider implementing new technology, and particularly when that bank or credit union is smaller in size and the technology is in direct contact. with customers. When it comes to mobile, scale has a particularly big impact, as smaller banks are often vulnerable to resource advantages held by larger rivals.

But despite the size disadvantage, or perhaps because of it, community banks and credit unions continue to step up their commitment to mobile. In his article, contributing writer Ed Lawler writes that banks have dramatically shifted the way they think about how best to achieve and maintain customer loyalty as mobile share grows.

For some institutions, an emerging model combines the ease of mobile connectivity with the depth of industry knowledge and other resources for more complex interactions. “(Clients) can start relationships with us via mobile,” one banker told Lawler, but they “place a high level of trust in our branches in case any questions arise.”

Banks and credit unions are centering their digital delivery strategies on their mobile apps, but what if the future had other ideas? I recently spoke with Mike Abbott, who leads the global banking practice at Accenture, about his prediction that we will see “the death of the mobile banking app” in the coming years.

He thinks the growing use of digital wallets will crowd out apps offered by individual banks, and that smaller institutions could benefit from this revamp as scale could be a less competitive factor.

Also in this month’s BAI Executive Report:

Buy now, pay later is here to stay: Vivek Dwivedi of Infosys says banks that miss buy now, pay later risk missing out on an important future revenue opportunity. Much of this opportunity appears to be demographic – research in 2021 shows nearly 40% of millennials and older Gen Zs in the US have used BNPL.

Build loyalty with a robust mobile banking application: Apiture’s Chris Cox suggests four questions that financial institutions need to answer thoughtfully when working to create a mobile app that customers will flock to. The first of these questions relates to product flexibility, which makes sense given how quickly the tech ecosystem tends to change.

Large-scale personalized and mobile banking services: FintechOS’ Mike Hughes writes that financial institutions need to act faster when bringing new mobile products and services to market, lest customers be poached by faster fintechs. The key to this, he says, is to better deploy data to develop a deeper understanding of customer wants and needs.

Access key insights from ‘Mobile Banking is on the Move’, BAI’s latest executive report.

Terry Badger, CFAis the editor of BAI.