Just four years ago, mobile banking was a channel largely untapped by consumers, consisting of only basic features like balance inquiry, ATM location and limited transaction history. Online banking maintained a slight edge over branch banking in customers’ preference for interacting with their bank, while mobile banking was typically only used by the affluent or tech pioneers.
Consumer preferences for interacting with their bank have changed a bit since then. A recent survey from the American Bankers Association showed that 10% of consumers prefer mobile banking to manage their bank accounts over other primary distribution channels like branch and online – up from 3% in 2010. The bar for mobile banking has been raised, with updates to apps that include remote deposit capture (RDC), in-app bill pay and P2P payment capabilities.
Mobile banking only appears to be gaining steam, with consumers expecting the ability to perform a majority of account management tasks on their smart phone or tablet. Fortunately for banks, there exist both indirect incentives for investing in the mobile space as well as direct economic incentives, many of which are conveniently intertwined with customers’ mobile banking demands.
A number of regional and national banks in the US have begun leveraging the simple, yet powerful camera feature of the smart phone, even beyond remote deposit capture (RDC) of checks. The use of a smart phone’s camera, or ‘mobile imaging’, allows consumers to quickly load information from an ID, credit card or utility bill into a digital loan application, funds transfer form or bill payment portal.
According to an article from Mobilepaymentstoday.com, one Texas-based financial institution has seen an 80% increase in transaction volume for photo bill payments and a 35% increase in the number of customers using this feature. Photo banking can save the consumer time on mundane, administrative banking tasks as well as reduce processing and overhead costs in a similar fashion to RDC.
In addition to cost advantages, an enriched mobile banking experience can bolster customer engagement. The ability to view a checking account balance before logging into the mobile app may appear as a mere convenience to the consumer but also happens to be a driver of customer engagement to the bank.
A number of banks have already updated their apps to include these enhanced login screens, which allow customers to view balances, recent transactions and other non-sensitive information without having to enter login credentials. Eliminating the friction associated with viewing account information can lead to a consumer mindset of ‘banking at their fingertips’ (literally) and an increase in number of interactions with the mobile banking app.
However, the number of customer interactions does not contribute to the top line itself. Banks should take advantage of the increased interactions by promoting relevant and contextual bank products at each login, which can drive incremental revenue. Additionally, dynamic login screens can be leveraged to create new revenue streams – one such tactic is implementing mobile account opening (MAO).
MAO allows both customers and non-customers to open a bank account directly through the mobile app. According to a recent survey by Javelin Strategy & Research, 20% of customers who tried to open a bank account through a digital channel over the past 12 months did so through a mobile device. Javelin’s research also suggests that consumers who actively use their mobile devices are more likely to opt into mobile payments, personal financial management or loyalty rewards programs, all of which have potential to generate fee income for a bank.
When paired with the photo banking features described above, banks can use MAO to expedite enrollment processes and quickly turn prospects into checking account holders. The checking account, of course, is a known launching pad for many other bank products.
Application developers and software providers have teed up the mobile landscape with the new functionality and innovative features described above, which banks can quickly exploit. Banks should capitalize on these developments and deliver enriched mobile experiences to their growing mobile-oriented consumer bases.