Retail banks can realize the full potential of mobile banking by offering segmented consumer experiences and advanced digital wallet capabilities, according to a study by Cognizant and Monitise.
Consumers are increasingly expecting banks to help improve their mobile lifestyles by providing anytime, anywhere capabilities; customized user experiences; shopping and social features, and value-added services. This, the study states, represents a new opportunity for retail banks to drive customer loyalty, attract new business, and generate more revenue.
The study surveyed more than 700 consumers from a diverse group of U.S. financial institutions, age ranges, annual incomes, genders, ethnicities, education, and employment backgrounds to understand their mobile banking expectations, emerging trends, and current and future needs.
Key study findings include:
Anytime, anywhere capabilities: Consumers are looking for greater functionality as they seek more options. This strongly relates to segmentation of consumer interest and behavior. Interest in remote check deposit and real-time alerts on unusual account activity are important features across segments that could induce consumers to switch banks.
Customized user experiences: Tablets have emerged as a unique and valued user interface with 41% of survey respondents wanting to use tablets compared with smart phones, and 60% of tablet owners preferring a tablet for mobile banking. Consumers are now using both devices for different purposes and want features optimized to suit each device's form factor. Feature personalization like rearranging tabs and functions is also important to more than 75% of the consumers surveyed. Offering this flexibility can give banks a competitive edge and help retain customers.
Better shopping and social experiences: Consumers want their bank to offer better shopping and social experiences and also prefer offers from banks rather than other mobile payment mediums. By offering discounts and offers from retailers on consumers' mobile devices, retail banks can increase mobile payment traffic. Consumers are also open to using social networking features on mobile banking apps/web sites for accessing information on new products and sharing opinions.
Value-added services: Consumers are seeking services that drive security, ease mobile payment use and provide insights on spending and bill payment patterns, and they're willing to invest in these products. More than one-third of consumers surveyed are willing to pay for advanced security features such as biometrics and nearly 30% of respondents indicated a willingness to pay for mobile payment capabilities.
"Amid the growing proliferation of digital channels and rapidly evolving consumer behavior, retail banks can no longer afford to adopt a one-size-fits-all approach in devising and enhancing their mobile strategies," says Vin Malhotra, consulting partner for Banking and Financial Services with Cognizant Business Consulting, Cognizant's consulting practice. "Providing innovative and personalized mobile services based on consumer segmentation will enable banks to not only run better by maximizing their investments, but also run differently by strengthening customer engagement and driving greater adoption of mobile banking for competitive differentiation."
"Smart phones and tablets are quickly becoming the main contact point between consumers and financial institutions," says Lisa Stanton, president of Americas at Monitise. "Integrating value-added services such as mobile payments directly into a bank's mobile application doesn't just build customer loyalty, but it also grows revenue and fights the growing threat of disintermediation."