Why banks should make use of mobile hardware features
We have previously written about the slowing rate of innovation in the core functionality of mobile banking apps, and some banks’ shift in focus towards hardware-based innovation. While financial institutions are facing big challenges and limitations in terms of core banking systems, the inherent features on mobile phones offer an opportunity to positively impact the customer experience. Unfortunately, it looks as though few are making use of them.
Push and in-app Notifications
For most brands, the competition in App Stores is high; user acquisition is only half the battle. Once the app has been downloaded, the challenge is to encourage engagement and stay at the front of the customer’s mind.
Push notifications need to grab attention, which is what most are designed to do, but more importantly, they need to add value to the customer. Good practice examples come from providers who use iBeacon to send contextual messages, to support and reassure the customer, at crucial points in the customer journey.
British Airways customers in Heathrow Terminal 3 or 5 receive push notifications to inform them that their flight gate is open. It’s a small and simple prompt that could, in an extreme scenario, mean the difference between making and missing a flight. Either way, the notification is very likely to have a positive effect on the customer experience.
Source: British Airways website
Another example is Apple Pay. After making a payment, the user will receive a notification with the details of the transaction. Here the aim is to reassure the user that the payment has been successful. Again, the feature is used right after the most crucial point in Apple Pay’s customer journey – the payment.
It would be interesting to see a bank implement something similar. If new customers were prompted to download the banking app to follow the application process, notifications could be used throughout different stages of, for example, a mortgage or credit card application. At the moment, American Express uses email communications to send updates and ask for additional information from card applicants. This means that there is a risk that communications get lost among other emails or in junk folders, resulting in negative customer feedback as the new applicant feels uninformed – an experience we know customers do face.
Unlike many brands outside of financial services, customer acquisition for most banks (with the exception of digital-only banks) happens before they get the mobile banking app: new customers would normally apply for a current account in the branch or through the bank’s website. This means that by the time someone downloads the app, they are already a customer. The challenge after that is to promote engagement and customer loyalty.
Out of the banks that we monitor in our Mobile Banking Dashboard, only 36% are offering push notifications to their customers. However, those who are doing so have seen great results. A case study on BNP Paribas claims that the bank had a 60% increase in App Store rating and a faster app update rate, from using targeted push and in-app notifications to ask frequent users to rate the app and to promote new features in the upgrade of the app.
In addition, there is evidence that in-app and push notifications significantly increase both engagement and retention. On average, users who enable push notifications have a nearly 3x higher retention rate compared to those who disable them. Furthermore, push-enabled users were found to have 88% higher engagement than push-disabled users.
Widgets give mobile users a snapshot of an app without the need to open it up. Their use is evolving, from displaying the same messages as in push notifications, to being a space that can offer pre-login functionality. Currently only 12% of the banks that we monitor are making use of this opportunity.
Widgets offer customers easy access to information. Most banks who are making use of widgets offer customers a view of their account balance. However, Simple and Mondo both offer a more contextualised view.
Mondo shows the account balance next to the spending for the day, making it easy for customers to assess their spending habits.
Simple are using their mobile banking Personal Finance Management feature, ‘Safe-to-spend’, to show a balance, which has taken into account any expected bills and regular savings towards previously set up goals.
Source: Simple website
Both providers offer good examples of how to contextualise an in-built feature to improve the customer experience.
‘Peek and pop’ and ‘quick actions’
Apple’s recent introduction of 3D Touch technology, only available to iPhone 6s and 6s Plus owners, enables shortcuts or a content pre-view to be accessed with the pressure of one touch.
‘Peek and pop’ gives users a preview of a piece of content within an app when they press on it.
An area to implement this feature could be in the transaction feed of the banking app, as it would enable customers to see a preview of the details of an individual payment. Earlier this year, we were told that BBVA and Number26 were both testing out the feature, but we are yet to see it. However, we have only seen one provider introduce it so far, Mondo.
Another introduction in the iPhone 6s was ‘Quick actions’, which gives the user a shortcut menu to specific pages within the app when they press the icon on the mobile home screen firmly. Société Générale was quick to launch this feature, with links to ‘main account’, ‘make a transaction’, ‘your bank account details’ and ‘activity feed’.
Although the current features relying on 3D Touch technology might not add to the core banking functionality, they do simplify customer journeys and going forward their absence would be noted by customers as expectations are raised.
Few banks are currently making the most of existing opportunities to engage customers with the use of hardware-based features. By implementing targeted push and in-app notifications, and widgets that add value to the customer, banks can delight customers and encourage loyalty with contextualised messages and information. Other technologies, such as 3D Touch, will incresingly become hygiene factors – ignore them and they will be sure to have a negative effect on the customer experience.
Banks might ultimately have to upgrade their legacy systems to compete with newer, more flexible players in the market. If and when this will happen, we don’t know. But, in the meantime, technological updates driven by mobile devices will continue to raise customer expectations. Banks who fail to keep up with providers outside of banking, will end up being the source of frustration for their digital-savvy customers. Inversely, those who decide to seize the opportunities to contextualise customer data will end up exceeding expectations.