Mobile Banking: How Critical is it?

Over 325 million people live in the United States with 77% of the population (nearly 250.8 million) owning a smartphone. Research shows that tech savvy Millennials and Gen Xers are more apt to own a smartphone and are likely to be dependent upon it. However, it’s not just the younger generations that are using them. Seniors are also using smartphone technology in increasing numbers. In this age of mobile usage and online banking it is crucial for banks to offer a robust mobile banking experience to their customers.

A recent Pew Research¹ survey offered an insightful glimpse of smartphone ownership demographics. One might think men are more gadget oriented than women, however, 80% of men and 75% of women own a smartphone, showing the interest is relatively mutual between genders. Unsurprisingly, in younger age groups almost everyone has a smartphone. In the 18 – 29 age group, 94% have one. The ownership numbers decrease as the demographics age, but are still quite significant.  A whopping 46% of seniors 65 and older are smartphone owners.

Smartphones are becoming the primary method for accessing the Internet across all age groups. Americans are switching over to this instantaneous, mobile access to information, instead of logging onto a home computer or locating a tablet. That means 91.2 million consumers do not have any Internet service and use only their phones for online financial activities.

People are embracing the use of smartphones to view their accounts more and more. A 2018 Bankrate.com² survey found that 66% of smartphone users in the US have at least one financial app installed. This report also indicated 64% of millennials and 59% of Gen Xers have at least one full-service banking app, while that number drops to 41% for those over the age of 55.

Giving your customers the ability to instantly check balances, desposit checks, pay bills, and transfer money, has a significant, positive effect on their financial health. A Citi Mobile Banking Study³ in 2017 reported that 65% of mobile banking users were confident they knew the balance of their accounts, versus 53% of non-mobile banking users. The study also found 42% of mobile banking users worry less about finances, 37% know more about bank services, and 35% are more confident in their financial decisions. Most importantly, 80% of users with ‘high functioning apps’ (those with 5 or more features) are likely to stay with their bank over the next 12 months, compared to 70% of those with low-functioning apps.

People turn to their smartphones for many different financial interactions. This can include anything from checking their account to trading stocks. Below are the top 3 functions people use in their mobile banking apps, according to Google4.

Mobile banking has a direct effect on customer satisfaction. Bain’s Net Promotor Score^SM, takes into consideration the quality of the experience along with the mix of channel volumes to determine a metric for customer loyalty. Among banks in the US, 70% of the difference in scores is due to the quality of experience rated by customers, with the mix of channels accounting for the other 30%. Apps help increase customer loyalty and decrease the number of branch transactions and costs. According to the Bain report, apps used for routine transactions are one-third more likely to delight a customer as opposed to similar transactions at a branch and only half as likely to annoy.

The digital world is growing and mobile banking is becoming a priority. The use of a mobile banking app gives customers a much easier form of banking, increasing your customer’s satisfaction. According to Google, 64% of consumers find ease of use most valuable in a financial app, convenience at 54%, extension of main bank/financial institutions comes in at 53%, followed by security at 40%.

According to a recent Bain⁵ report, the features in a mobile app attract and keep customers; more than other banking methods including.

ATM

Branch Relations

Phone Banking

Mobile banking apps can lower a bank’s operating costs by having fewer branches, while still providing the same amount of routine transactions to customers.

Having a great mobile banking app is crucial when growing your bank, while also keeping your current customer satisfaction rate high. Building better relationships with your customers through technology is essential. Technology is the future and staying ahead of the curve will help you not only retain your current customers, it also gives you the ability to adapt and grow.

¹http://www.pewinternet.org/fact-sheet/mobile/

²https://www.bankrate.com/personal-finance/smart-money/americans-and-financial-apps-survey-0218/

³https://bankinnovation.net/2017/10/do-mobile-banking-apps-help-with-financial-awareness/

⁴https://www.thinkwithgoogle.com/advertising-channels/apps/app-marketing-mobile-banking/

⁵http://www.bain.com/publications/articles/customer-loyalty-in-retail-banking-2015-global.aspx

ASI has been a leader in providing innovative core banking software, digital banking solutions, and data processing services for community banks nationwide. An array of integrated applications provide partnered banks with competitive choices. This flexibility enables our partnered banks to address processing requirements associated with providing leading customer service, while delivering industry-leading technology backed by unparalleled in-house conversion, training, and support teams.

To request more information, please contact us at 402.420.6000 or fill out the online demo request at www.asiweb.com

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