With every wave of new technology, there is great opportunity for those who are correctly poised and ready to grapple with innovation. Simultaneously, these waves of technology also bring great risk to the survival of players who decide not to engage with new technology and to hold onto the ways of the past. This is the current scenario with mobile banking technology in the bank and credit union industries.
Recent Research on the Switch to Mobile Banking
UK-based consulting firm CACI recently published research with some startling figures on the growth of mobile banking. Importantly, this research notes a transition in customer/member behavior from online computer-based interactions to mobile app-based interactions. The report predicts that banking activity within a financial institution’s mobile app will increase by 121% between 2017 and 2022. The report also predicts online computer-based banking will simultaneously decrease by 63%.
This increased use of mobile will have the impact of decreasing the number of customer and member visits to physical branches. As individuals are able to perform more and more banking transactions on their mobile phone, there simply becomes less need for one to be inconvenienced by such a visit. CACI’s research predicts that 18-24 year olds will decrease their visits to a physical branch by two-thirds from 2017 (currently six visits per year) to 2022 (a predicted two visits per year). This decrease in visits to physical branches is also predicted among “households without children.” In 2017, this demographic visited branches about eight times per year. However, in 2022, this group is expected to visit physical branches only three times per year.
Mobile Apps Must Be Feature-Rich and Continually Innovate
To adapt to this change, banks and credit unions must provide native and delightful mobile apps to their members and customers. It is important too that these mobile apps are rich with features and functionality and do more than simply show user balances. On this point, a study by Citi suggests that financial institutions with feature-rich mobile apps increase customer and member retention. This study compared customers of banks with “high-functioning” apps, apps with more than five features, with customers of banks “low-functioning” apps, apps with fewer than five features. The study found that users of high-functioning apps were 10 percentage points more likely to “stick with their bank in the next twelve months” than users of low-functioning apps.
For financial institutions to remain competitive, these mobile apps must constantly adapt and innovate, as they will become the main point-of-service between a financial institution and its customers/members. The most competitive and innovative mobile banking apps today, for example, are now implementing mobile video-banking features, where customers and members can be connected directly to an agent or adviser via a video-feed within the financial institution’s mobile app.
Banks and credit unions must adapt to this current transition in customer and member behavior if they are to be competitive and successful in the coming years. Financial institutions that offer great custom mobile apps to serve their customers and members today will best position themselves to be ready for the coming increases in demand for mobile banking. To read more on our work with mobile banking, take a look at our mobile app development with Belfius Bank of Belgium here or check our our mobile video-banking solution VidyoCore here.
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